The news highlight for me today was Nestlé’s purchase of the Gerber Products Company for $5.5 billion. That baby on the jar is sure worth a lot: and why not? The Michagan-based company, currently owned by Novartis (NYSE:NVS) has been a staple for moms since 1928. With the Gerber acquisition, Nestlé will gain an 82 percent market share in the U.S. baby food market. It’s a win/win proposition for both parties in my estimation.

So where’s this blog post going you ask? Well, I’m not going to talk any further about baby food if that’s what you mean. Rather, I’ll explore a couple of stocks whose businesses also collide with the newborn; companies whose products or services parents buy and their infants loyally use.

Choice #1 - GSI Commerce Inc. (NASDAQ:GSIC)

The name will mean little to most people unless you work or invest in e-commerce. Started in 1999 by serial entrepreneur Michael Rubin, their initial focus was setting up online shopping sites for sporting goods retailers. They’ve since branched out to other areas of retail and have offices and distribution centers, both in the United States and Europe. The company provides a soup to nuts approach to e-commerce, allowing each partner to customize the services they require to make their site hum and the register ring; metaphorically speaking. Some of the clients they work with include Babies “R” Us and Nickelodean, both very familiar to parents across the country.

Here’s the upside: in 2002, the company revenues were $173 million with an operating loss of $35 million while 2006 revenues were $610 million with an operating profit of $10 million. Can you say turnaround? The company stuck to its plan despite the red ink it was hemorrhaging and today they are the leader in internet commerce. I challenge you to find an equal other than eBay. Besides, the stock trades at a reasonable price; with a PEG ratio of less than 1, and a price to sales ratio of 1.63 (eBay’s is 7.71), not to mention the latest fourth quarter was extremely solid, you’re going to enjoy owning this baby.

Choice #2 – Kimberly-Clark (NYSE:KMB) 
 
Diapers; they’re pretty hard to do without if you’re the parent of a newborn. You can use cotton if that’s your thing but you’ll generate a lot of hydro in the process of washing them. Unless of course you’re brave enough to wash them by hand in which case you deserve a medal. All kidding aside, you and I wouldn’t see so many ads for the product if the demand wasn’t there.

Okay, you’ve had a baby. You now need to diaper the little one. Whose product do you choose? I’m assuming for a second you’ve decided to forego the medal and do what millions of parents do each and every day: buy the disposable kind while grocery shopping or visiting the drug store. The numbers quickly add up and so do the profits. According to Stealing Share, the brand development firm, Kimberly Clark sells more disposable diapers than Pampers and Luvs put together. In 1968 when the company created Huggies, Procter and Gamble’s Pampers brand held virtually 100 percent market share. Almost 40 years later and the trend’s reversed itself.

This is a company, with multiple brands beyond disposable diapers, that generates $16 billion in sales. It’s a behemoth with a market capitalization of $32 billion, paying an annual dividend of $2.12, yielding over 3 percent at current stock prices. The Huggies business accounts for $3.6 billion in sales or slightly over 20 percent of the total. This is a large company and sometimes, large objects don’t move very quickly.

However, if you're patient and need a large-cap stock in your portfolio, Kimberly-Clark fits the bill.