Saw this analyst "downgrade" of Hasbro which I thought was interesting, because she blames the toy industry environment rather than anything specific at Hasbro. It is true that Toys'R'Us has been hurting recently, hasn't it? Seem to recall that big name have-it-all stores like Wal-Mart are eating into the toy sales Toys'R'Us usually sees. Though should it matter that much *where* Hasbro sells its toys as long as they sell???It's also funny because one might expect that when a competitor begins to slump (such as Mattel), that the leader would be given more favor. Whereas here, the competition's troubles are seen as reflecting on the "difficult industry climate." No one ever claimed there was logic involved here.--Jeff=====http://cbs.marketwatch.com/archive/19991004/news/current/ratingsgame.htx?source=blq/yhoo&dist=yhoo=====Krutick downgraded Hasbro to an "outperform" from "buy" based on slowing momentum, tough 2000 comparisons and what she called a difficult industry climate. Hasbro shares responded with a tumble of 1 3/4, or 7.9 percent, to 20 5/16."Tight retail inventories, cannibalization from video games, a mixed international scene, competitive licensing market and turmoil at Toys 'R' Us (TOY: news, msgs) is a tough setting," Krutick said, adding that she saw limited upside potential for "Star Wars" toys and possible rising competition for Pokemon cards.Krutick cut her 2000 earnings-per-share estimate to $1.58 from $1.70 a share to reflect a more subdued industry backdrop and less hot-toy momentum. Krutick also sliced her $37 price target to $26.As for Mattel, Krutick advised maintaining caution "on this volatile situation" after the toymaker pre-announced a huge third-quarter shortfall that was "significantly worse than our worst-case scenario."
This is already old news, but an applicable reply to this message. Individual Investor magazine chose HAS for their pick of the day a few weeks ago. At todays price level, it should be extremely attractive. And I do not believe The "industry" is in any slump. There is more and more money available for toys, and the Christmas season is going to prove it. HAS is goin to be the major player this holiday season, and you will see it in their bottom line.see the following: http://www.individualinvestor.com/tbd/anfdt_frm.asp?context=2&id=2160&ticker=HAS
Toys R Us is in trouble because they are yesterday's business model, and they are being hurt by e-Commerce. Mattel is in trouble because they are making yesterday's products.Hasbro is a forward-thinking company that is attuned to the current market trends, both from a product and distribution standpoint. It is unfortunate that the problems in other companies are taking down the short-term stock price for HAS, but ultimately this is going to lead to Hasbro's industry dominance and high long-term earnings.
"Star Wars" toys and possible rising competition for Pokemon cards. I just wanted to take issue with this anaylists statement. What Hasbro has done is to buy an exclusive on the ccg market. No one can compete with pokemon card game, because the company (Wizards of the Coast) that Hasbro bought,not only created the CCG market (customizable card games) but they get royalties from anyone making any other kind of ccg games. Kids are not going to switch from Pokemon to something else that easy. Also Hasbro has bought the ability to make CCG games for every other license they own in the future... What will be the next Pokemon? Well whatever it is Hasbro will be selling it.
arinsdad wrote:but they get royalties from anyone making any other kind of ccg games. Sorry, but that's less than fully accurate. They hold a patent on certain, very specific, mechanics used in the Magic trading card game, but they don't get royalties on EVERY CCG. Some CCG companies have signed licenses with them to allow them to use the mechanics or out of fear of a lawsuit, but not all of them have done so. Any game that doesn't use the mechanics in the patent is free and clear.I read the patent soon after it was announced. It's limited in scope. What sticks in my mind is the "tapping" technique, turning a card on 90 degrees to show it's been used. It's been a while since I read it, but nothing else sticks with me.AravineHubby - Daddy - Old GamerDepending on the phase of the moon
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