Starting with Mr. Potato Head in 1952, Hasbro (HAS) has grown into a global toy and game manufacturer, notes John Buckingham, value investor, money manager and editor of The Prudent Speculator.
The company's products include household names such as Transformers, Nerf, Play-Doh, Monopoly, Power Rangers, Peppa Pig, and many others.
It also exclusively licenses Disney’s primary brands, including Marvel, Star Wars, and Disney Princesses/Frozen, and Sesame Street to develop toys and games.
Media revenue has been a challenge this year as live action production was put on hold due to COVID-19, but we like this business for the long term. Despite a recovery since March, shares are down roughly 20% year-to-date.
We like that the firm has shown ability to keep expenses under control, and we see its business as resilient to economic downturns as parents and grandparents will sacrifice to ensure there are toys and games under the Christmas tree or at the birthday party, while folks spending more time at home are looking for additional options to keep the kids entertained.
Additional opportunities for growth come from overseas markets and its historically successful acquisition strategy. We expect a sizable bounce back for HAS over the long term and our patience is supported by a handsome 3.3% dividend yield.
