Seasonal shares that could bring festive cheer

As the stock market remains volatile and retailers face the worst Christmas for thirty years, investors could be finding it harder to spot shares that offer value. Nick Raynor, investment adviser at The Share Centre, identifies ten shares that could benefit from people tightening their purse strings this festive season.

1. Diageo

The British maker of Smirnoff, Johnnie Walker and Guinness, could benefit over the festive period as more people decide to celebrate Christmas and the New Year at home. Its share price has not performed too badly over the past year, having dropped only 9.8 per cent. Diageo is also offering a yield of 3.6 per cent despite many companies cutting or getting rid of their dividends.

2. Albemarle and Bond

The AIM-listed pawnbroker's share price has held up reasonably well during recent market fluctuations. In fact, Albemarle and Bond posted a 38 per cent jump in annual profits in September. With ‘credit crunch Christmas' just around the corner, the pawnbroker could benefit from an increase in sales as people look for ways to raise extra cash this year.

3. BAT

British American Tobacco (BAT) is renowned for its defensive properties and has good International exposure to cigarette markets. Consumers are unlikely to give up their cigarettes and tobacco despite tax increases. This combined with its commitment to increase dividends and for long-term organic growth makes BAT a buy for income seekers and the risk averse.

4. Begbies Traynor

The Aim-listed support services company could benefit from other's misfortunes as the economic downturn continues to squeeze company profit margins. In fact, recent results reported the company was on track to meet full year forecasts due to the mounting level of insolvencies. Over 75 per cent of the company's revenues are attributed to its insolvency business. Over the last year its share price has soared over 35 per cent and now stands at 139p.

5. Ladbrokes

Bookmakers have traditionally experienced less volatility than other retailers during stock market fluctuations. However, Ladbrokes hasn't performed particularly well of late; its share price has plunged over 40 per cent during the past year to 189p. Despite its significant weakness in 2008, high-risk investors looking for long term value could see this as an opportunity to pick up a much undervalued company, which could also be a target for takeover.

6. National Grid

The electricity suppliers share price has been weak as of late as concerns were raised over debt levels. However, the debt does look manageable so investors could look to take advantage of its current weakness. As Christmas draws ever nearer we may even see an increase in the use of electricity, as people put up their decorations and turn on the kettle while listening to the Queen's speech! National Grid offers good defensive properties and is currently yielding 5.1 per cent.

7. Morrisons

Morrison's reported a very good set of figures in early December. Over the past 13 weeks the retailer has seen an additional 700,000 customers per week through their doors. Third quarter sales reflected this gain in market share as volumes rose over 8 per cent. Its market share has also risen to 11.8 per cent. Morrisons' is continuing to expand, having bought a further 38 stores from the CO-OP for £223 million.

8. Vodafone

Despite some companies having to make redundancies, Vodafone is busy creating new jobs. The mobile giant plans to open 18 new stores by March 2009, proving there is still an appetite for mobile technology. Its share price has fallen over 26 per cent during the year, but sales could receive a boost over the festive period. Vodafone is currently offering a yield of 5.5 per cent.

9. HMV

HMV is expected to announce first-half results 11 December. Considering the recent demise of Woolworths, HMV may well see some benefit, but this is unlikely to impact figures significantly in the short term. The retailer's share price has held up reasonably well this year, having fallen just over 8 per cent. HMV is also currently offering a high yield of 7 per cent.

10. Halfords

Retailers in general have taken a battering of late, but given Halfords weakened share price and good dividend yield of 6.6 per cent, long term investors could use the opportunity to pick up cheap shares. The car-maintenance chain and bicycle retailer could also benefit from penny-wise consumers, as many may consider buying more practical and long-term gifts this Christmas.