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Profiting From the Mini-Baby Boom
By: Wang's Happy Trading   Sunday, August 24, 2008 11:30 PM
Sectors: Computer and Technology , Finance , Industrial Products , Medical
Symbols: CGI, DIS, GYMB, HRS, MATK, PLCE
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Population growth is the lifeblood of all civilizations and societies. It is a carried promise of further development and prosperity in a nation. The U.S. is in fact in the midst of a mini baby boom and there are long term opportunities here for the looking. A record number of babies were born in the USA in 2007, according to early federal data that some demographers say could signal an impending baby “boomlet.” In 2007, 4.315 million births were reported by the National Center for Health Statistics, giving us a glimpse of the growing lengthening trend in the US. This number would be a new milestone and record or the U.S. The last time the number was this high was in 1957, which coincidentally was in the middle of the “baby boom” years from 1946 to 1964. Demographers have been monitoring gradual increases in recent years; data for 2006, which won’t be made final until September, show a 3% increase over 2005. That’s the largest single-year increase since 1989.

“I suspect this is the beginning of a new kind of baby boom, although it’s going to be nowhere near the baby boom of the 1950s or ’60s,” says demographer Arthur Nelson of the University of Utah in Salt Lake City. “It will be sort of a boomlet.” Nelson attributes the 2007 numbers to a “perfect storm” of factors: more immigrants having children, professional women who delayed childbearing until their 40s, and larger numbers of women in their 20s and 30s in the population, keeping the fertility rate high. The average number of births per woman was 2.1 in 2006, the highest since 1971. For 8 years straight, the US has had a gradual increase of over 4 million births a year which has never happened before in its history and it doesn’t look to slowdown anytime soon.

There is a strong fundamental factor that is a characteristic of any powerful society and that is, it’s sacrifice to provide for their children above all else. “Companies that have a vested interest in all things babies will benefit,” says Ken Harris, of consulting firm Cannondale Associates. “Consumers, generally, tend to not skimp on their children,” Harris says, adding that this trend is true even in tough economic times. “Parents will trade down in other areas.” This mini-boom is an investable trend that could have long legs to it. Here are some long term ideas on profiting from it.

MARTEK BIOSCIENCE (MATK)

Anyone with a baby has probably heard of DHA and its ability as a dietary additive to enhance mental and visual development in infants as well as lowering cardiovascular risk. Its products include nutritional oils used in infant formula, nutritional supplements, and food and beverage fortification ingredients. This special additive is seen as a great product that plays into a parent’s promise.

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