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Every year around this time, in addition to participating in the customary holiday gift shopping in preparation for Christmas, I find it important to develop my shopping list in preparation to purchase stocks ahead of the anticipated annual Christmas rally. Investopedia describes is as "surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations for the Santa Claus Rally phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week."

While I'm not convinced the reason for it, it does seem to happen each and every year at least among certain types of stocks, though not always at the exact same time. Often the stock types I'm referring to are the oversold, under-loved, over-shorted, and even sometimes downright hated stocks, which can make great contrarian ideas to go long.

In this article I have selected 3 hated stocks that are household names that may be ready to roll when the Santa Claus Rally hits (which historically could happen any time in December -- the key is to be ready well in advance.)

Facebook (FB)

After Facebook's great fall following its May 2012 $38 per share IPO, the stock has been a favorite that investors love to hate. But now with 2013 on our necks and analyst estimates for FB being as high as $0.85/share, the current price in the $26 range, the forward PE is getting cheap, as the estimated earnings are rising as the share price is lower, It is 32% below its IPO price with rapid sales and earnings growth -- dare I say FB is starting to look like a bargain? Don't tell my Wall Street pals I said that. Facebook is supposed to be a stock hated universally.

This holiday season will be the first season as a public company that investors will be sharing pictures and stories with each other on their Facebook pages -- expect that they will get a soft spot in their hearts for FB as an investment again too. With over 600 million people and growing using Facebook on their mobile devices, with FB already figuring innovative ways to monetize this, FB expectations for 2013 will start to grow with optimism. Get in early.

Best Buy (BBY)

This one is nearly priced for death already. Anybody who wanted out, for the most part, must already be out. With the share price in the $13 range, it's barely trading over book value and still quite profitable. Add to that the very real possibility of a surprise boost to BBY's top and bottom line this season. You'd never know it from the stock price, but BBY was the "No. 3 retail website on Cyber Monday, with 9.3 million visits, a 10 percent increase in traffic as compared to 2011" Add to all this the speculation of a buyout from its ex-CEO still supposedly going through the steps for a possible announcement in late December, and then a 26.6 million share short position which is a short ratio of over 5, and BBY could be back in rally mode just in time for eggnog.

Zynga (ZNGA)

Zynga is the poster boy for contrarian investing. As I've detailed in my other my article in September and then another earlier this month, their core business is imploding. Things just look awful for them long term. But they've just been pulverized with so much bad news in the last year it's hard to imagine it's not priced in (for now). At this point, investors will be purely speculating and betting on the future regarding Zynga making a turnaround and expanding into mobile, online gambling, licensing, etc.

There's the psychological effect of the $2.00 share price "looking cheap." Plus they're trading around book value, not much higher than cash per share, and have a $200 million share buyback program under way. Last but not least, I expect some sort of promotional push to boost numbers like they did last quarter with announcements on Sept. 19 and again on Sept. 26; I expect more of that type of push again this quarter, and it should be just in time for the Santa Claus rally. Hold your nose and jump in for a ride. The bulls are overdue to get the upper hand for once.

Source: The Upcoming Santa Claus Rally: Facebook, Best Buy, And Zynga