Hasbro shares - games and profitable investments
Often people who buy Hasbro stock are driven not by a detailed analysis of financial statements or the company's acceptable value, but simply by their love for their products. Moreover, their products are already very familiar to the Russian consumer as well. Especially those who have children. And the game "Monopoly" is probably known throughout the world, and 19 March is even marked the world day of "Monopoly". The brand was first introduced back in 1935.
Synopsis: about Hasbro promotions
Shares of Hasbro are traded at American stock exchange NASDAQ since 1978, the company's ticker to be searched on the stock exchange's website, as well as on other sites that provide information on stock exchange quotations, HAS. During March, the price per share fluctuated between $76 and $80. IN THE LAST TWO YEARS THE SHARE PRICE HAS RISEN FROM $55 TO NEARLY $80. Over the past two years, the share price has risen from $55 to nearly $80. IT HAS RISEN TO NEARLY $80 IN THE PAST TWO YEARS. Hasbro is on the list of index S&P 500The U.S. is the largest 500 companies in the U.S., which is compiled by Standard & Poor's rating agency.
Over the past 10 years, Hasbro stock has outperformed S&P 500 Index. This can be seen in the graph below.
If you look at how the company is run, it is clear that management understands perfectly what intellectual property it controls and what customers need. Of course, the company is not perfect, but it is nice to see that management is trying to catch the mood of customers. This is unlike, for example, Activision Blizzard, which focuses more on marketing expenditures than on game development.
Hasbro Intellectual Property
The company itself divides its intellectual property into several categories, but the two main ones, on which the entire business rests, are well-known brands and challenger brands. Well-known brands make up the majority of intellectual property. They are the main focus of the company's attention. Claimant brands are assets that, according to the company, have a certain potential and may become wellknown.
Well-known brands include Magic: The Gathering, Monopoly, Littlest Pet Shop, My Little Pony, Nerf, Play-Doh and Transformer. The challenger brands are Furby, Furreal Friends, Kre-O, Baby Alive and Playskool. It was the well-known brands that brought 52% revenue to the company in 2015.
Control of currency risks
By controlling currency risks, Hasbro showed excellent growth for its key brands: 2% in 2015 (7% excluding currency movements), 31% in 2014 and 14% in 2013. Given that revenue has only grown by 8% in total since 2012, the importance of these key household brands to the company has only grown over time, as has the importance of entering foreign markets. The Asian market is a key market to conquer. There has always been a strong love of gaming in Asia. And the rapidly emerging middle class in high-growth countries like China is ripe for Hasbro.
Hasbro's strength is largely due to its solid history of investing in the development of well-known brands.
Advertising costs
Advertising spending at Hasbro has been erratic, but, overall, it has stayed at the same level over the past five years. For example, if you look at Activision Blizzard, you can see a decrease in product development spending over the past five years, while advertising spending has been increasing. Hasbro focuses on developing and building brands that shape the company's story. It's not just flashy ads promoting a product. In the long run, Hasbro's approach has a much better chance of success.
Hasbro's licensing agreements with Disney
Hasbro is not solely focused on its intellectual property. The company often enters into deals with other brand owners to make products using their brands. Partner agreements generated 28% of revenue in 2015, making licensing an extremely important source of Hasbro's net income.
Hasbro's most influential partner is Disney. Their partnership has been developing for many years. The companies are constantly sharing their ideas.
Now Hasbro sells Disney products under license agreements for Marvel (Spiderman, The Avengers, etc.) and Star Wars brands. In 2016, the company will bring to the market for the first time products under the Frozen brand, which by this time almost everyone has heard of. Also, in the coming year, "Captain America: Civil War" and "Rogue One: A Star Wars Story" (Star Wars: Outcast) films will be released on the big screens, which will only increase the company's revenue in the future.
It is important to remember one thing: Disney gave, Disney can take back. Mattel shareholders went through this when Hasbro effectively ripped the Frozen brand license agreement out of their hands. Hasbro needs to continue to build on this relationship, and mistakes here are unacceptable. Losing some or all of the agreements with Disney would hurt Hasbro's financial position and negate any effort.
Increasing margins
While Hasbro is working hard to increase revenues, the company's margins are quite high. Gross margin increased from 49.24% in 2011 to 53.77% in 2015. Excellent growth. Falling commodity prices, reduced shipping costs and a deliberate move to consolidate and modernize production have had the most positive effect on Hasbro's bottom line.
Unfortunately, administrative and management costs and selling expenses increased (from 28% of revenue in 2011 to 31% of revenue in 2015).
This is mainly due to the significant development costs of the aforementioned products, various restructuring costs, and an increase in share-based compensation paid to employees. Nonetheless, operating margins increased from 13,86% in 2011 to 15,56% in 2015, despite higher costs. Operating expenses should decline as the restructuring eventually ends and gross margins continue to improve due to lower costs.
Conclusions and trading ideas
Hasbro is capable of generating about 16% of operating margin in 2016. The company's 2016 projections cite higher operating margins and smoother operating expenses. The margin increase, along with revenue growth, will be driven by the long-awaited release of Princess and Frozen.
That's not to say that Hasbro stock is cheap right now. They are trading at a P/E ratio (ratio of share price to earnings per share) of 21.96.
But the company expects significant growth in financial indicators in the coming years, as the quality of its own assets and those received under license agreements improves. If we look at the company's cash flows, we also see an overall increase in operating cash flows and free cash flow.
All of this makes stocks The company is a good choice, better than, for example, the giant Coca Cola, whose shares are trading at the same rates, but the company has no growth prospects. At this point, Hasbro is a great company to invest in.
Buying shares of Hasbro , it's quite a profitable investment .
I don't even know if I should wait a year for this asset to grow in value or to actively trade and get a lot more during this period.
Hasbro shares are a good investment, but for the long term. I advise to buy shares of Activision Blizzard, Blizzard's Warcraft movie is coming out in May, and fans of the universe will raise the intellectual brand with their activity, and therefore the growth prospects of Activision Blizzard stock are very big and much better than Hasbro!
This is further proof of how much management means in management, but also the field of activity is obligatory - the intellect is the basis of anything.
In my opinion, Hasbro shares have great potential. The potential of monetizing their brands through the network is not fully disclosed, and this will happen sooner or later, which will affect the share price.
You can invest in Hasbro stock only because it is listed in the S&P 500 index.