Should Investors Be Playing in Hasbro or Mattel?

By Glenn Curtis  DEC 21, 2009 10:30 AM

Or might there be even more fun in Target?

 


I like snow. But two feet of snow and the lingering backache that goes with shoveling it -- not so much.

Asian stocks ended mixed. The Heng Seng was off 1.08% but the Nikkei was up 0.41%. European stocks, however, were in positive territory early this morning. And here in the US, we’re currently trading higher.

Here’s what I’m seeing this morning:

Hasbro (HAS):
Justin Sharon points out that BMO Capital Markets upped its rating on the company.

I think Hasbro, at about 14.8 times the 2010 estimate, is approaching fair value. Although I'll concede that if it can bust through the 52-week high, it could have some legs from current levels.

As for Mattel (MAT), I think its a little better deal at 12.9 times the 2010 estimate. Although if I were betting on toy sales, I’d rather try a play on Target (TGT).

Take-Two Interactive Software
(TTWO):
Game on?

Bloomberg reports that Harbinger has a 7% stake.

I haven’t seen the filings, nor have I see this reported anywhere else, but I'd find it very interesting if it's accurate. Last week in Why Icahn's Stake in Take-Two Is Score for Company, I opined on why Icahn's stake was good news for shareholders.

My thoughts:

1. These heavy hitters wouldn't consider bellying up unless they thought they were going to make some coin.

2. I’m speculating, as are some of the websites/news outlets, that with Icahn in the stock, we may see some sort of merger or combination with another company. The chatter is that Electronic Arts (ERTS) and it may end up together.

3. I suspect the high-profile interest will turn out to be a big positive for shareholders. You have to figure Take-Two's existing board is going to be doing everything in its power to prove its worth in the near-term. Potash (POT):
A Soleil analyst downgraded the company to Sell.

I’m not feeling a lot of love for Potash right now. But if the stock were to pull back to the $80s for some reason, I’d probably take another look. Keep in mind that it's done a pretty good job exceeding Street expectations this past year and is expected to kick out some decent earnings in 2010, so I don’t want to count it out entirely.

Bottom line, I’m putting this one on the radar screen, and I have a feeling I’ll be revisiting the story in the New Year.

For my previous take on Potash, click here.

Palm, Inc
(PALM):
Macquarie upped the company to Outperform and I wanted to weigh in.

I’ll be the first to admit that the shares appear more attractive than they did near their highs, but I’m not climbing aboard on the heels of this news. As I’ve said before, with a palm full of red expected this year, I have no inclination to grab onto the shares. Why should I? If it comes down to the single-digits, however, or if the profit picture suddenly clears, I’ll revisit.

For my last take on the company, see Why Palm's First-Quarter Beat Isn't Enough.

Have a great day!
No positions in stocks mentioned.

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