Hasbro, Inc. (HAS) Toys: Making Money And Providing Fun At The Same Time

Is Hasbro A Buy?

The answer to the question of whether or not Hasbro Toys is a buy lies in the person asking the question. There are two outlooks for Hasbro.

The first, is a cyclical toy company. It has its hit toys one year and they fall off to a new hot toy the following year. Most times, it is not the same toy manufacturer who makes hit after hit, so you have unpredictability when it comes to the toy industry.

The second is a marking company. Since Hasbro has sold off its manufacturing plants, it is solely a company that markets and sells toys. This allows for greater stability over the long term. It focuses its efforts and investments into figuring out what kids want and is better able to market and sell to them, thus improving the bottom line.

In addition to this, Hasbro, Inc. (NASDAQ:HAS) has taken a different approach to toys. It sees itself as a storyteller now. It focuses on brands that last a long time. For example, girls will always be interested in princesses and boys will always be interested in robots. As a result, you have toys that span years of popularity and not just one holiday season.

Many investors like what they hear in regards to the second point. By re-inventing themselves, Hasbro has turned its highly volatile business into a more stable company and can better anticipate results. This doesn’t mean it won’t have bad years, but most believe that the bad years won’t be as bad or come at such a surprise any longer.

Because of this, many analysts are expecting the company to grow in the high single digits per year for the next couple of years. While some may argue that some of this growth is already priced into the stock, which is currently trading at $98 a share, many believe there is still a lot of room for the company’s stock to push higher.

Estimates for 2017 earnings are at $4.66 a share and for 2018, $4.91 a share. If Hasbro Toys can hit these numbers, you can expect the stock to be more than $100 a share.

The time to buy the stock is now. It is up to you as to whether or not you wait for a dip or market pullback before getting in. The only downside to this strategy is getting outpriced if the pullback never comes.

This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.