With “Elf,” we find Will Ferrell doing the same thing he did during his career at Saturday Night Live — taking mediocre material and making it a joy to watch. Ferrell’s performance makes “Elf” the best Christmas movie since “A Christmas Story.”

Ferrell stars as Buddy, an orphan who sneaks into Santa’s bag of presents one fateful Christmas Eve and finds himself at the North Pole — a land filled with cartoon penguins, snowmen and jovial elves overflowing with Christmas spirit.

Buddy is raised by Papa Elf (Bob Newhart), but is not as proficient at making toys as the other elves. He decides he needs to head to New York City and meet his biological father, Walter. Walter, a modern-day Scrooge — played wonderfully by James Caan — never knew of Buddy’s birth.

The whole second act of the film, which is mostly Buddy getting acclimated to New York City, is simply magical. Ferrell displays the finest physical comedy since Woody Allen in “Sleeper.” I was in tears seeing Ferrell trying to navigate the streets and department store escalators of the big city.

There is a warm sense of joy that just oozes out of Ferrell. You can tell he just loves what he is doing. From the pratfalls to his child-like wonderment his character displays, it is obvious Ferrell really cared about this project and wanted it to succeed.

Ferrell ends up working at a department store, helping a phony Santa, which also involves the movie’s best sequence — Buddy letting all of the children know the mall phony isn’t the real Saint Nick.

When Buddy is not getting into various shenanigans, he is trying to win his father’s heart. This takes place during the latter part of the second act and the third act. While it is engaging and funny during the times Walter is trying to deal with the inconvenience that is Buddy, the film hits its weakest point as soon as Walter has a sudden and unexplainable change of heart. Walter, with no rhyme or reason, decides to quit his job after he hears Buddy is missing.

The third act finds Santa getting stranded in New York because there’s not enough Christmas spirit to fly his sleigh and Walter trying to locate Buddy after kicking him out of his home. With all of this action, the film is light on one main ingredient — Ferrell. Ferrell carried the film up to this point with his charm and comedic talents; it’s a shame he is almost nonexistent in the home stretch.

The third act is also where director Jon Favreau changes the tone with which he first started. The first two-thirds of the film had a loving but cynical approach, but when the third act gets into full swing, Favreau lays on more syrup than Buddy at the supper table. This is the biggest mark against an otherwise wonderful film.

“Elf” is a big success in establishing Will Ferrell as an entity beyond Saturday Night Live skits. With a character as simple as Buddy, Ferrell is able to show extreme depth in his acting. “Elf” is a wonderful film in the sense that it shows that Ferrell has the potential to be the most successful Saturday Night Live alum since Bill Murray.