Monday, February 15, 2010

Bankers in Toy Land: Mattel & Hasbro


There will always be children expecting Santa Claus to stuff their stockings with the latest and greatest toys. Christmas 2010 seems like a long way off, but investors in those toys that will make their way from Santa's sack or the nearest Target are already full of good cheer.

Mattel and Hasbro have continued to fair relatively well despite the current economic conditions. Mattell is up 5% this year, and its rival stock, Hasbro, is up 12% this year. It gets better for other toy companies. Take Leapfrog for instance; its up 20% this year. This week also happens to be when the American International Toy Fair will take place. It all goes down in New York, and Wall Street should expect to see the value of toy companies continue to rise.

Will the good news last? Hasbro CEO, Brian Goldner, expects Hasbro to continue to do well. Hasbro will be making toys to go along with some popular movies soon to hit theaters. When "Transformers 2" came out last summer, Hasbro earnings 77% because the transformers toys were so popular. Mattel has been increasing its Barbie line, and Hot Wheels continues to be a top seller. Interestingly, Hasbro, though, has been focusing on its male audience, while Mattel has been focusing on its female audience. However, if the recent strength of the dollar continues, then these two companies may see their stocks slip.

Hasbro increased its dividend. Both stocks are trading near their 52 week highs; it's a little hard to say if you should follow the advice of your 4-year-old and buy these toys. Then again, you never know, Barbie might just be the bullish girl your portfolio always needed.

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