Related topics: retail, Apple, shopping, Amazon, spending

This year's must-have gadgets and toys are flying off the shelves as the holiday gift-buying season rises to a crescendo.

Investors might consider betting on holiday shopping trends, calculating that when fourth-quarter results are announced, shares of companies with best-selling items should get a boost.

Let's take a closer look at seven hot gifts that could make for hot stocks.

Apple/iPad

Apple (AAPL, news) doesn't need help from the holidays to qualify as a hot stock. The question is whether, with shares up about 50% this year, the king of technological innovation can get any hotter.

You bet it can. Last year the buzz was all about the iPhone. This year the company is printing money with its iPad device. According to Amazon, the iPad is the top-selling computer tablet on the market.

Apple is fast becoming the Procter & Gamble (PG, news) of the electronics market. Every tree is likely to have some sort of Apple gift under it. I expect the company to beat estimates starting with the quarter ending Dec. 26. Apple deserves a 30 multiple, given its growth prospects, putting my target for the stock close to $600 per share. There is more to bite out of this Apple.

Deckers Outdoor/Ugg

In 2005, when I was managing my publicly traded mutual fund, I made Deckers Outdoor (DECK, news) one of my top holdings. Shares at that time traded for less than $10, on a split-adjusted basis, and the company's Ugg product was just becoming popular.

Ahead of this year's holiday season, there was concern that the Ugg trend may be running out of steam. But a perusal of Amazon shows no let-up in sales. Ugg is the No. 2 seller in the women's shoes category, and the company is increasing its efforts in the men's shoe market, recently signing Patriots quarterback Tom Brady in an endorsement deal.

So the trend shows no sign of slowing, but does that mean the stock is a buy? Not in this case. Although I expect the company to beat analyst estimates of $3.71 for 2010, I can't endorse paying more than 20 times earnings for this stock. Investors

Microsoft/Kinect

Microsoft (MSFT, news) is best known for work-minded products like Office, but this year it has a hot gadget kids, teenagers and even a few adults are hoping to find under the tree. The company's Kinect for Xbox, which lets you play video games using your body as the controller, has captured the imaginations of gamers and turned former nongamers into enthusiasts as well. (Microsoft publishes MSN Money.)

Sure, with a company the size of Microsoft it takes a huge hit to move the needle, and Kinect won't move it much. But, as we have seen with Apple, a hot device can get people to take a second look at a whole product lineup. And Microsoft is already riding a string of successes with Windows 7 and the new Windows mobile phone.

Its successes justify a higher valuation. Put a 20 multiple on projected per-share earnings of $2.45 in the quarter ending June 30 and you have a stock trading for nearly $50. That makes Microsoft cheap today.

Amazon.com/Kindle

Conspiracy theorists might call foul on the Kindle e-reader appearing as the best-selling consumer-electronic item on Amazon.com (AMZN, news), but they would be barking up the wrong tree. According to Amazon, the wireless reading device has been the company's top seller for two years running.

The stock trades for 70 times trailing earnings and 50 times forward earnings. Those are nosebleed numbers reminiscent of the dot-com boom. The hottest-selling gift is also a hottest-selling stock. I would be careful with this one.

Garmin/Nuvi 250W

Garmin's Nuvi 250W 4.3-inch widescreen portable GPS navigator also appears on Amazon's list of hot consumer electronics, ranking No. 7.

Investors may have forgotten Garmin (GRMN, news), but consumers have not. The GPS device has been on the top 100 list at Amazon for more than 500 days, and it continues to be a popular holiday gift.

Here is an opportunity for investors to jump on a hot-selling item before the stock heats up. A deep recession triggered a collapse in Garmin shares, which have yet to recover, but a stronger auto industry and a consumer willing to spend could help push the stock higher.

Blue Nile/diamonds

Diamonds are a girl's best friend -- even in a struggling economy. Diamonds remain a go-to gift for those who want to express love or romance, and even if money's tight, Blue Nile (NILE, news) is there to help consumers obtain the gems at lower prices. Investors are aware of the trend, and shares of Blue Nile climbed 9% in the first half of December.

Analysts expect the company to make 96 cents a share in the year ending Jan. 3, 2011. In order for this stock to trade at a reasonable trailing price-to-earnings ratio of, say, 30, the company would need to make nearly double that amount. I'm not buying it, and neither should you. This stock is too hot.

Best Buy/TVs and laptops

If you are talking about hot gifts, you are invariably talking about electronics. And where do consumers shop for electronics if they're not buying online? The leader is still Best Buy (BBY, news), and from what I've seen, its parking lots are full.

Analysts expect Best Buy to make $3.59 a share in its current quarter. A big beat by the company would make Best Buy a hot stock in 2011.