The new Elmo does some pretty neat things. He'll slap his legs for starters, before going into more technologically astute theatrics like rocking in a sitting position and pounding his furry red fists on the floor as he rolls on his tummy. It's a far cry from the original and its rudimentary vibrating giggle.
So Mattel has the hit of the 2006 shopping season? Don't be so quick with that crown. Hot toys are rarely orchestrated. The original Tickle Me Elmo, much like Pixar's Buzz Lightyear or Ty Beanie Babies, was an unexpected winner. In fact, it's often the initial scarcity that launches a "must have" toy, and that's frequently due to low expectations from the start.
Wasn't Leapfrog (NYSE:LF) supposed to have a hit with its FLY pentop computer last year? What about Hasbro's (NYSE:HAS) iDog, Zizzle's iZ, or Mattel's Pixel Chick?
In other words, hit toys don't RSVP at toy fairs. A series of elements, including a fair share of luck, ultimately dictate the hot toys under the tree.
You have seen it already with Tickle Me Elmo. New versions of the Sesame Street staple have gone on to do everything from the chicken dance to the hokey pokey to belting out "YMCA." They have been brisk sellers, but it's not easy to catch lightning in a bottle twice.
Thankfully, Elmo is a toddler toy. That means Mattel won't have to duke it out with budget-busting electronic gadgetry like the next-generation gaming consoles from Sony (NYSE:SNE) and Nintendo or the updated portable music players being put out by Apple (NASDAQ:AAPL).
There may be some other reasons to buy into Mattel at the moment. Philip Durell spelled out a pretty compelling valuation proposition for the toy maker in recommending the stock to his Inside Value subscribers. Just don't find yourself buying in with grand hopes of striking it rich on Tickle Me Elmo's coattails.
Do that, and you can just imagine Elmo having a good laugh at your expense.
Hasbro is a recommendation forMotley Fool Stock Advisorsubscribers. Mattel made the cut forInside Valuereaders.
Longtime Fool contributor Rick Munarriz has bought a few Elmos over the years. He does not own shares in any of the companies mentioned in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.
