5-Star Stocks Poised to Pop: Hasbro

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Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, toy maker Hasbro (NYSE: HAS) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Hasbro's business and see what CAPS investors are saying about the stock right now.

Hasbro facts

Headquarters (Founded)

Pawtucket, R.I. (1923)

Market Cap

$4.1 billion

Industry

Toys and games

Trailing-12-Month Revenue

$3.92 billion

Management

CEO Brian Goldner (since May 2008)

CFO Deborah Thomas (since May 2009)

Major Brands

Playskool, Transformers, My Little Pony, Littlest Pet Shop, Tonka, G.I. Joe, Milton Bradley, Parker Brothers

Return on Equity (Average, Past 3 Years)

22%

Cash/Debt

$297.4 million / $1.16 billion

Dividend Yield

2.7%

Competitors

Mattel (Nasdaq: MAT)

JAKKS Pacific (Nasdaq: JAKK)

CAPS Members Bullish on HAS Also Bullish on

Johnson & Johnson (NYSE: JNJ)

CAPS Members Bearish on HAS Also Bearish on

Walt Disney (NYSE: DIS)

Dell (Nasdaq: DELL)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 1,090 members who have rated Hasbro believe the stock will outperform the S&P 500 going forward. These bulls include daniel5724 and RandyHall.

Just three weeks ago, daniel5724 tapped Hasbro as a transforming opportunity:

They have some good franchises they are finally capitalizing on and should feed into future profits. A third installment of Transformers and a sequel to GI Joe is in development. Both are 100 million blockbusters and the merchandising will reward the investors that are patient for at least two to three years.

In an earlier pitch, RandyHall expands on the stock as a rather marvelous find:

Hasbro is attempting to follow the good example laid out by Marvel (NYSE: MVL). They have intellectual property in the form of household brand names for toys that just about everyone knows. G.I. Joe (while not a particularly engaging film) was successful enough that we're sure to see a sequel, prompting more toy tie-in sales. If they can leverage some of the "little girl" brands in their corral, they could bring increased mindshare to a new generation of kids. Think of it this way: Movies are the 21st century equivalent of toy commercials of the 70's and early 80's.

What do you think about Hasbro, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Hasbro, Disney, and Marvel are all Motley Fool Stock Advisor picks. Disney is also an Inside Value choice, as is Dell. Johnson & Johnson is a selection of Income Investor. The Fool owns shares of Hasbro. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 30, 2009, at 10:59 AM, catoismymotor wrote:

    Thank you for opening our eyes to Hasbro. Before reading this article I thought of them as being just a board game company. I'll have to add this company to my watch list.

  • Report this Comment On November 30, 2009, at 12:33 PM, Melaschasm wrote:

    Will Hasbro follow the lead of Marvell or DC?

    All three companies have vast Intellectual Property Assets, that are not being fully utilized.

    TV, movies, and computer games are all markets where the three companies are not taking advantage of excellent opportunities.

    Hopefully now that Marvell has shown the way to dramatically increase profits, the other two will get their acts together.

  • Report this Comment On November 30, 2009, at 1:48 PM, michaelaknight wrote:

    I picked up HAS recently during a dip with the same logic as this article. They have strong brands that are just now begining to be utilized. Their brands, while not as "timeless" as Marvel's, are reimerging at an opportune time in relation to the maturing Gen-X'ers who literally grew up on Gi Joe, Transformers and My Little Pony. Unlike Marvel's brands, who ultimately were (though are no longer) limited to comic book nerds (like myself) I think Hasbro's brands are much more accesible to that generation as a whole (not to mention their children). Meaning you could probably count on your hands the number of friends that had a daredevil comic book, but every kid had and/or watched the GI Joe cartoons (or transformers, or My Little Pony).

    Also it should be noted that they recently (May?) announced a joint venture with Discovery Channel to create a new "high quality" kids and family network that will ultimately showcase Hasbro's brands:

    ROMPER ROOM, TRIVIAL PURSUIT, SCRABBLE, CRANIUM, MY LITTLE PONY, G.I. JOE, GAME OF LIFE, TONKA and TRANSFORMERS with educational filler from Discovery.

    I can see this stock paying off nicely a year from now.

    You can watch the webcast regarding the Discovery partnership here:

    http://www.hasbro.com/corporate/media/press-releases/hasbro-...

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