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Stocks H / Hasbro, Inc.


Subject:  Re: Baffling Downsizing Date:  1/10/2000  9:52 AM
Author:  blondydog Number:  647 of 1222

I agree with you in some respects on Hasbro. The stock price is too low, for starters, just based on current information. Hasbro's biggest competitor is Mattel which sells at almost 500 times earnings. Hasbro trades at 12 times earnings which is modest in ANY industry. The electronic entertainment industry is also typically traded at much higher EPS ratios. The big kid on the block there is EA and they trade at 45 times earnings.

With all of the great products Hasbro produces (especially POKEMON which somehow got 4kids a ridiculous stock price but did nothing for Hasbro which makes everything and anything Pokemon in North America) its kind of amazing that this stock is so often overlooked. I know that the tech/computer arena has been the focus of most indie investors but Hasbro has exposure there too with one of the biggest electronic entertainment divisions around.

As to your questions behind the closing of the MicroProse facility in NC and the impact of that decision on the future. Outsourcing really is the way to go for computer games. Only it isn't really outsourcing in the truest sense of the word. Companies like EA cut their teeth on publishing games from smaller developers that couldn't get the dough to put a product out themselves. They have some of their own in house design teams like the EA Sports label but the majority of their projects are undertaken by external publishers (in some cases those publishers are owned by EA but they are still driven by their own internal management processes and are not in the same building with the bulk of EA's management team).