One in a special Top Stocks series on buying stocks for newborns.

My second daughter was born on April 16, and immediately I was back in baby mode. However, unlike most new parents, I see everything through a stock-colored lens.

First, we were posting pictures to Facebook. Then we were buying diapers from Amazon (AMZN). Now we are stocking up on organic baby foods from Annie's (BNNY) and Hain Celestial (HAIN).

None of these companies, however, offers a pure-play bet on the buying needs of new parents. Then a gift arrived at the door: a super cute outfit from Carter's (CRI). Ah, Carter's! The company is 100% dedicated to babies and very young children. Therefore, whenever there's a rise in this demographic, Carter's is your play. (Conversely, if there's a decline, shorting or puts are equally relevant.)

We never invest in companies without a reasonable risk-reward ratio. So, even if Carter's satisfies our Cheat Sheet investing framework variable T -- trends support the industry in which the company operates -- we still want to make sure the financials are clean.

In this case, Carter's is a bit pricey on the valuation side. It also carries a reasonable amount of debt, which violates our screen E -- equity-to-debt ratio is close to zero. However, profitability metrics such as operating margin (9.12%) and return on equity (14.68%) are solid.

Given the company's stability on the finance side, this is a safe stock to profit from baby demographics. So, although I wouldn't be chasing Carter's higher at these levels, it's definitely one to put on your watch list for any meaningful changes in birthing statistics.

Damien Hoffman is the co-editor of Wall St. Cheat Sheet Premium Newsletter. As of this writing, he did not own a position in any of the aforementioned stocks.