With Christmas season upon us, many investors are looking for different ways they can make some extra money to stock up the Christmas tree with extra presents for their kids. The question is, what are you going to invest in to make that extra cash? Look no further than the maker of the toys you will be buying. When it comes to retail stocks I like Hasbro (NASDAQ:HAS).
Hasbro is one of the world’s largest toy makers. Hasbro has revolutionized itself taking advantage of technological advancements and the media world. What do we mean? Hasbro has capitalized by launching its very own new children-focused television network called The Hub. Since its launch, The Hub has seen sequential growth in ratings, with all-day viewership of over 34,000. This venture has been ingenious, as not only does Hasbro generate incremental advertising revenue, but it also adds a new dimension when it comes to marketing, allowing Hasbro to market their own toys and games to all their viewers throughout the day. This has been a great new tool for Hasbro as it has significantly helped increase revenues and total profits.
Numbers Don't Lie!
Like we said earlier, the numbers don’t lie. Hasbro should be applauded for their steady and consistent annual growth over the past few years. What’s even more impressive is when you look at the time frame in which they accomplished this. Instead of falling flat when both the U.S. and Global economies collapsed, Hasbro did the opposite and since then have failed to have a down year. When other retailers were closing up shop due to significant drops in consumer spending, Hasbro found a way to continue to grow both total sales and total net income. Yes that’s true, since 2007, Hasbro has grown sales 3.9% and total income 11% annually. During this same time frame, Hasbro’s stock price has risen 23% a year annually. I see no reason to expect a slow down for Hasbro. HAS trades at forward P/E of 15, they hold a PEG Ratio of 1, a P/S Ratio of 1.2, and boasts a 3.5% dividend yield. The fundamentals are sound, the balance sheet is good, the levers of growth are great and overall company is solid from top to bottom.
Don’t Expect Hasbro to Slowdown Anytime Soon!
With the Christmas season coming up, it’s time for American's to shop! Nothing screams toy sales more than the holiday season. It's this time of year when toy sales skyrocket through the roof. I believe the 2011 Holiday Season will be even more impressive as compared to past years for once we have an improving economy, upbeat retail expectations, and consumer spending is on the rise, all of which bode well for Hasbro both short and long-term. After everything is all said and done I believe Hasbro will rise to over $60 per share, a total gain of 58%. Tack on that 3.5% dividend yield and you have a total net gain of 61.5% on your initial investment. Can you say Christmas comes early?
Disclosure: I am long HAS.