Why LeapFrog Is Poised to Outperform

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, educational toy maker LeapFrog Enterprises (NYSE: LF ) has earned a respected four-star ranking.

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

LeapFrog facts


Headquarters (founded)	Emeryville, Calif. (1995)
Market Cap	$606.7 million
Industry	Leisure products
Trailing-12-Month Revenue	$581.3 million
Management	CEO John Barbour (since 2011) COO Michael Dodd (since 2010)
Return on Equity (average, past 3 years)	14.1%
Cash / Debt	$120.0 million / $0
Competitors	Hasbro (NASDAQ: HAS ) Mattel (NASDAQ: MAT ) VTech Holdings

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 88% of the 411 members who have rated LeapFrog believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, DLester78, offered some parental insight into LeapFrog bull case:

My daughter loves these things. [T]raditional toy manufacturers have to be quaking in their boots with the rise of digital toys and games. Who wants a [GI Joe] action hero made of crappy plastic and lead based paint made in China? My daughter's peers (4 year olds) all love the [LeapFrog] systems and have them. I see a potential for them to be a takeover target as well.

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