Dec. 18 (Bloomberg) -- David Webb, an investor activist whose stock recommendations have outperformed Hong Kong’s benchmark index in seven of the past nine years, named Alco Holdings Ltd. as his “Christmas Pick” on the company’s prospects to weather weakening consumer spending.

Alco surged 17 percent to HK$1.42 as of the 12:30 p.m. break in Hong Kong trading today, the biggest gain since July 2003. The advance reduced the stock’s decline this year to 56 percent, compared with a 45 percent drop by the city’s benchmark Hang Seng Index.

Alco，a supplier of consumer electronics for customers including Wal-Mart Stores Inc., will maintain sales because of its focus on lower-priced products that are increasingly popular as “consumers trade down,” the investor said on his Webb- Site.com Internet site yesterday. Webb has a more than 5 percent stake in the Hong Kong company, he said.

Shinhint Acoustic Link Holdings, chosen as Webb’s selection last year, jumped 18 percent on Dec. 4, 2007, after he named the stock as his “Christmas Pick.”

Alco’s profit fell 12 percent to HK$90.2 million ($11.6 million) in the six months to Sept. 30, the company reported last month.

Commonwealth Bank of Australia owns 5.9 percent of Alco, according to Bloomberg data.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: December 17, 2008 23:47 EST