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Hasbro (HAS - Free Report) provides children’s and family leisure time products and services worldwide. The company operates through U.S. and Canada, International, Entertainment and Licensing, and Global Operations segments. Its brands include Playskool, Tonka, Super Soaker, Milton Bradley, Parker Brothers, Tiger, and Hasbro Interactive. Some of its popular games and products include Monopoly, Twister, Connect 4, Scrabble, Jenga, The Game of Life, Operation, Play-Doh, and Nerf.
Hasbro’s diversified toy and game product line has brought earnings momentum to the company and helped the stock become one of the best performers of 2016, up over 25%. The company recently became a Zack Rank #1 (Strong Buy) making it the Bull of the Day.
Fundamentals
Hasbro has a market cap of $10.5 Billion with a Forward PE of 20. The stock sports a Zacks Style Score of “A” in Growth and has of VGM score of “B”. The company has an expected 3-5 year growth rate just above 13% and it pays a dividend yield of 2.42% while you wait for that growth.
Relative Strength
Over the last two years Hasbro has outperformed, returning almost 70% verse just under 10% for the S&P 500. The combination of growth and a strong of earnings beats have lead to the stock surge, but the driver has been the company’s ability to capitalize on hot toy markets.
Toy Fads and Opportunities
Whether it is Avengers, Star Wars or Angry Birds, Hasbro excels at marketing and profiting off the toys of popular moves. It’s a pretty simple concept that starts when a kid see the movie, then see the commercial for the toy, and then bugs their parents till they give in and buy the toy.
Last quarter CEO Brian Goldner had some comments on this success during the earnings conference call: “Demand for STAR WARS: THE FORCE AWAKENS products continued to be high and we benefited from the addition of DISNEY PRINCESS and FROZEN fashion and small dolls. We are very encouraged with global demand and our outlook for 2016.”
This past week, a woman that bought a Hasbro Chewbacca mask at Kohl’s (KSS - Free Report) put an entertaining video on Facebook that went viral. This led to sell outs of the mask at both Kohl’s and Hasbro stores. The company’s ability to capitalize on trends and events like this continue to drive sales quarter over quarter.
Earnings and Estimates
Hasbro reported Q1 earnings on April 18th. EPS came in at $0.38 verse the $0.24 expected, while EBITDA came in at $117 Million verse $93 year over year. Domestic growth was strong, with the US/Canada segment coming in at 28% year over year, while international was seen at 13%.
Looking at future earnings, estimates are headed higher for fiscal year 2016 and 2017. For the current year estimates have jumped 3.5% over the last 60 days, from $3.95 to $4.09. For next year during the same time period, estimates have gone 3.4% higher, from $4.38 to $4.53.
While future growth may seem to be priced into the stock, as long as the EPS momentum continues, any pullback should be bought.
EPS Surprises
Hasbro will go for its seventh straight beat on July 18th. Since the streak began the stock is up over 50%, heading form the $55 area to $87. If the beats can continue the stock’s price momentum should continue higher.
In Summary
Hasbro’s diversified product line, nice dividend and exposure to popular movies and trends makes it an interesting play. While a lot of the good news looks to be priced into the stock at the moment, there is still room for growth and higher prices. An investor’s best approach, rather than chasing the stock, should be to wait for pullbacks and enter during market corrections.
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Bull of the Day: Hasbro (HAS)
Hasbro (HAS - Free Report) provides children’s and family leisure time products and services worldwide. The company operates through U.S. and Canada, International, Entertainment and Licensing, and Global Operations segments. Its brands include Playskool, Tonka, Super Soaker, Milton Bradley, Parker Brothers, Tiger, and Hasbro Interactive. Some of its popular games and products include Monopoly, Twister, Connect 4, Scrabble, Jenga, The Game of Life, Operation, Play-Doh, and Nerf.
Hasbro’s diversified toy and game product line has brought earnings momentum to the company and helped the stock become one of the best performers of 2016, up over 25%. The company recently became a Zack Rank #1 (Strong Buy) making it the Bull of the Day.
Fundamentals
Hasbro has a market cap of $10.5 Billion with a Forward PE of 20. The stock sports a Zacks Style Score of “A” in Growth and has of VGM score of “B”. The company has an expected 3-5 year growth rate just above 13% and it pays a dividend yield of 2.42% while you wait for that growth.
Relative Strength
Over the last two years Hasbro has outperformed, returning almost 70% verse just under 10% for the S&P 500. The combination of growth and a strong of earnings beats have lead to the stock surge, but the driver has been the company’s ability to capitalize on hot toy markets.
Toy Fads and Opportunities
Whether it is Avengers, Star Wars or Angry Birds, Hasbro excels at marketing and profiting off the toys of popular moves. It’s a pretty simple concept that starts when a kid see the movie, then see the commercial for the toy, and then bugs their parents till they give in and buy the toy.
Last quarter CEO Brian Goldner had some comments on this success during the earnings conference call: “Demand for STAR WARS: THE FORCE AWAKENS products continued to be high and we benefited from the addition of DISNEY PRINCESS and FROZEN fashion and small dolls. We are very encouraged with global demand and our outlook for 2016.”
This past week, a woman that bought a Hasbro Chewbacca mask at Kohl’s (KSS - Free Report) put an entertaining video on Facebook that went viral. This led to sell outs of the mask at both Kohl’s and Hasbro stores. The company’s ability to capitalize on trends and events like this continue to drive sales quarter over quarter.
Earnings and Estimates
Hasbro reported Q1 earnings on April 18th. EPS came in at $0.38 verse the $0.24 expected, while EBITDA came in at $117 Million verse $93 year over year. Domestic growth was strong, with the US/Canada segment coming in at 28% year over year, while international was seen at 13%.
Looking at future earnings, estimates are headed higher for fiscal year 2016 and 2017. For the current year estimates have jumped 3.5% over the last 60 days, from $3.95 to $4.09. For next year during the same time period, estimates have gone 3.4% higher, from $4.38 to $4.53.
While future growth may seem to be priced into the stock, as long as the EPS momentum continues, any pullback should be bought.
EPS Surprises
Hasbro will go for its seventh straight beat on July 18th. Since the streak began the stock is up over 50%, heading form the $55 area to $87. If the beats can continue the stock’s price momentum should continue higher.
In Summary
Hasbro’s diversified product line, nice dividend and exposure to popular movies and trends makes it an interesting play. While a lot of the good news looks to be priced into the stock at the moment, there is still room for growth and higher prices. An investor’s best approach, rather than chasing the stock, should be to wait for pullbacks and enter during market corrections.
Note: Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.