Nintendo (NTDOY) Has Risen 44% in Last One Year, Outperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of Greenhaven Road Capital‘s top stock picks. Greenhaven Road Capital, an investment management firm, is bullish on Nintendo Ltd (OTCMKTS:NTDOY) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Nintendo Ltd (OTCMKTS:NTDOY) stock. Nintendo Ltd (OTCMKTS:NTDOY) is a video game company based in Japan.

On August 1, 2019, Greenhaven Road Capital had released its Q2 2019 investor letter. The investment firm significantly added Nintendo Ltd (OTCMKTS:NTDOY) stock to its portfolio in Q2 2019. The stock has posted a return of 43.8% in the trailing one year period, outperforming the S&P 500 Index which returned 20.0% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Nintendo Ltd (OTCMKTS:NTDOY) stock has risen by 37.3%.

Greenhaven’s fund posted a return of -4.0% in the second quarter of 2019, underperforming the S&P 500 Index which returned 4.3% in the same quarter. Let’s take a look at comments made by Greenhaven Road Capital about Nintendo Ltd (OTCMKTS:NTDOY) in the Q2 2019 investor letter.

“We added one significant new position to the portfolio in the second quarter: Nintendo (NTDOY). Given the average age of our limited partners and their likely preference for reading over gaming, our readers might be surprised to learn that today’s worldwide gaming market is estimated to be in excess of $120B, far bigger than the movie industry. Nintendo is the publisher of 20 of the top 25 all-time games, including hits such as Mario Kart, Super Mario Brothers, Legend of Zelda, the Pokémon series, and Wii Sports. In fact, Mario products (games, movies, merchandise, etc.) have outsold Harry Potter products. Of course, Mario has been selling since 1981 vs.1996 for Potter, so on an annualized basis, Harry wins, but on an aggregate basis – score one for Super Mario. Comcast-owned Universal Studios has seen enough sustained excitement around Nintendo characters that they are building dedicated theme park areas for them. Comcast’s CEO, who is not prone to hyperbole said, “Nintendo, which we’re very excited about… [has an] IP (intellectual property) that rivals Potter in terms of its potential impact in all of the studies we’ve done.”

Nintendo is covered in detail in a four-page appendix to this letter for those interested. The headline version is that Nintendo is likely becoming a much better business that should be able to grow revenues, improve margins, and receive a multiple expansion from the market place. With some relatively conservative assumptions, there is a path to more than doubling our capital while enjoying some downside protection from the significant assets on the balance sheet.”


Our calculations showed that Nintendo Ltd (OTCMKTS:NTDOY) isn’t ranked among the 30 most popular stocks among hedge funds.

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Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.