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Analysts Sees Strength in Toy and Consumer Staple Sectors

Monday, 23 Jul 2007 | 2:06 PM ET

Earnings reports have been trickling in for the past week, and two analysts have predictions for which companies and sectors will perform well next quarter.

Jeff Macke, of CNBC's Fast Money, thinks Hasbro, maker of games, puzzles, and electronic toys, is an investment, not a trade.

"This is the peak for them. They did real strong orders on Transformers, and they've done great on Spider-Man," Macke said on "Power Lunch," naming two movies released this summer. "The bet I'm making as a shareholder who's not selling into this...is that this is a well-managed company."

Consumer Goods Earnings
Insights on McDonald's earnings, with CNBC's Phil Lebeau and what to expect from consumer earnings, with Nik Modi, UBS analyst; Jeff Macke, CNBC contributor; and CNBC's Bill Griffeth

In addition to Hasbro, which reported a higher-than-expected 24 cents a share for its second quarter, Macke said toy company Mattel also performed well.

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"Consumers are still lining up for items," he said. "If you meet them with quality, they'll come to your store in droves."

However, UBS Analyst Nick Modi sees "mixed signals" when it comes to earnings from companies that depend on consumer buying.

He attributed his belief to weak earnings reported by premium cosmetics companies last week.

As for Colgate-Palmolive, Modi said the producer of dental, personal, and home care products is a great investment "going into the next quarter and over the next 12 months."

Modi said Colgate's 12% earnings growth and "good international exposure" -- as it generates 45% of its business from emerging markets overseas -- make it a good investment.

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