Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electronics giant Sony (NYSE: SNE ) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Sony's business and see what CAPS investors are saying about the stock right now.
Sony facts
| Headquarters (Founded) |
Tokyo (1946) |
| Market Cap |
$20.3 billion |
| Industry |
Consumer electronics |
| Trailing-12-Month Revenue |
$91.5 billion |
| Management |
CEO Howard Stringer
CFO Masaru Kato
|
| Return on Equity (Average, Past 3 Years) |
(3.7%) |
| Cash/Debt |
$18.7 billion / $13.2 billion |
| Competitors |
Apple (Nasdaq: AAPL )
Microsoft (Nasdaq: MSFT )
Koninklijke Philips (NYSE: PHG )
|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 28% of the 1,632 members who have rated Sony believe the stock will underperform the S&P 500 going forward. These bears include monaarts and Yacabe.
Just last month, monaarts touched on fierce forces working against the stock: "Sony used to charge high prices because the[y] were a leader and now they just charge high prices. With competition from Lg and Vizio in the television market, Microsoft and Nintendo on the gaming front, and Apple in the mp3 player market, Sony is running out of places to do well in with little creativity and R&D."
In fact, Sony sports a rather anemic three-year average operating margin of 2.1%. That's lower than consumer electronic foes such as Apple (28.7%), Microsoft (38.2%), and Philips (6.3%).
CAPS member Yacabe elaborates on the bear case:
From what I can see, Sony has a very complicated business model. I'm not only going to throw this into my too hard pile, but I'm going to rate it as an underperformer. It has to spend way to[o] much money to keep up with customer demand. Berkshire Hathaway has individual companies owned by Berkshire Hathaway that are self sufficient. Sony is a death trap for your money. Don't bother.
What do you think about Sony, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
Interested in another easy way to track Sony? Add it to your watchlist.
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