A record 247 million shoppers visited websites and stores through Black Friday and the Thanksgiving weekend and spent an average of $423, according to a survey commissioned by the National Retail Foundation. These figures were up from 226 million shoppers spending an average of $398 last year, while total spending over the period was estimated at $59.1 billion.

Big Box retailers like Walmart (NYSE:WMT) and Target (NYSE:TGT) aren't the only beneficiaries of this year's record-breaking holiday shopping season. In fact, Walmart's stock moved down 6% over the past month, while Target's stock fell 2% over the same period. Investors may instead want to look at the actual product manufacturers.

Recreational stocks have outperformed the S&P 500 by 13.4% over the past month, according to TickerSpy's Recreational Product Stocks Index. Perhaps even more importantly, the index has outpaced the S&P 500 by some 68.2% since its inception on January 1, 2008.

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The Big Three
Armed with this knowledge, let's look at the three strongest performers this month:

Sturm, Ruger & Co. (NYSE:RGR) is trading 25.9% higher over the past month, driven by both the presidential elections and the holiday shopping season. The National Shooting Sports Foundation reported a single day record of 154,873 criminal background checks on Black Friday, which are required for potential gun buyers in the United States - 20% higher than in 2011.

Earlier this month, the company also declared a special dividend of $4.50 per share payable on December 21 to shareholders on record as of December 7. The move comes in addition to the firm's existing 2.22% dividend yield and will help improve its return on shareholders' equity metric to more accurately reflect the net assets being used.

Callaway Golf (NYSE:ELY) is trading 16.6% higher over the past month, driven by a rebound in golfing after a rough 55% drop since January 2007 and the holiday shopping season. During the first nine months of 2012, golf rounds played throughout the U.S. grew 7.5% compared to 2011 due to favorable weather conditions, according to Golf Datatech.

Recently, the company hired Oliver "Chip" Brewer as its CEO to help it turn around by restoring profitability and increasing long-term shareholder value. The executive has extensive experience in the golf business, with a focus on sales and marketing, but also in turnaround situations working with Adams Golf in the past.

Nautilus (NYSE:NLS) is trading 18.8% higher over the past month, driven by holiday sales and strength in its direct business. Last quarter, the company reported net sales that increased 1.7% to $38.1 million and gross margins that improved 650 basis points to 48.7% due to the shift from retail to direct sales across many of its product channels.

According to Mr. Cazenave, the momentum in the direct business is very encouraging, and both the retail and direct businesses are well positioned for more profitable growth. New products remain a big area of focus as well, with a number of new products slated to hit shelves during the fall/winter season, including the re-launch of the CoreBody Reformer.

Best Ways to Play the Trends
The companies mentioned above are all benefiting from strong secular trends and/or turnaround situations that make them unique investment opportunities. But investors should be careful to incorporate them into a diversified portfolio to mitigate risk, while keeping in mind that some momentum may disappear after first-quarter holiday shopping results.

The Bottom Line
Investors looking to capitalize on specific opportunities without taking on a lot of risk may also want to explore options strategies like covered calls or LEAPS. These strategies can help reduce break-even points over time by realizing option premiums or providing access to a company's upside for a relatively low option premium - although an amount that could be lost entirely.

At the time of writing, Justin Kuepper did not own shares in any company mentioned in this article.

Tickers in this Article: RGR, ELY, NLS, WMT, TGT

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