Is LeapFrog Enterprises, Inc. (LF) a Great Investment?

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By keying into this trend of more adult products for kids while maintaining the kid-centric design, LeapFrog has the ability to pull further away from the competition in terms of profitability.

LF Profit Margin TTM Chart

LF Profit Margin TTM data by YCharts

Valuation-wise, too. Both Hasbro and Mattel trade at 13 times estimates, while LeapFrog goes off at 11 times estimates; but with its enterprise value trading at less than 10 times free cash flow, it becomes a real bargain basement stock.

Shares of LeapFrog Enterprises sit some 25% below the 52-week high they reached last August, and though the months following the holiday spending orgy tend to be quieter for toymakers, I see real opportunity for the educational electronics toy leader to leap to higher ground. But let me know in the comments box below whether you agree that LeapFrog deserves to be on the playground of your portfolio.

The article Is LeapFrog a Great Investment? originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey owns shares of Apple, Walt Disney (NYSE:DIS), and Hasbro. The Motley Fool recommends Amazon.com, Apple, Google, Hasbro, LeapFrog Enterprises, Mattel, and Walt Disney. The Motley Fool owns shares of Amazon.com, Apple, Google, Hasbro, LeapFrog Enterprises, and Walt Disney.

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