HAS

Patience Almost Always Pays Off

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A couple weeks ago, we outlined how patience and perspective are two very valuable qualities when it comes to investing. We used Google (GOOG) in that example, which spanned a longer time period, but we think Hasbro (HAS) is also a firm that fits the mold but over a shorter one. Many times investors use peer or industry performance to ascertain whether a closely-related firm will perform in similar fashion. Though there is undoubtedly an association between end market demand for each firm in a given industry, outside of the commodity-producing spaces, individual firm-specific dynamics can often counteract or mitigate what otherwise could have resulted in poor performance for all, indiscriminately. Mattel (MAT) sent shutters through the toy industry when … Read more

Mattel’s Results Fail to Impress; Awaiting Hasbro’s Earnings in February

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On Friday, toy maker Mattel (MAT) reported disappointing fourth-quarter financial results that sent tremors through much of the physical toy industry. The firm noted that worldwide net sales fell 6% from the prior-year quarter, with North American gross sales down 10% and ‘International’ sales roughly flat with the same quarter a year ago. Weakness across its core brand portfolio was startling: Barbie down 13%, Hot Wheels down 8% and Fisher Price down 13%. The only core brand that advanced was American Girl, which nudged just 3% higher. Adjusted earnings per share came in at $1.07 versus the $1.12 mark in last year’s quarter. Though the bottom-line results missed expectations by $0.13, it didn’t stop the board from raising the dividend … Read more

The Best Ideas for 2014 and Beyond: Part II

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A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Dividend Growth Gem Hasbro Boasts Excellent 3Q

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Hasbro (HAS) posted solid third-quarter revenue and earnings Monday that exceeded consensus expectations. Revenue jumped 2%, while operating profit improved 3% thanks to modest improvement in the firm’s operating margin. Adjusted net earnings of $1.31 per diluted share in the third quarter compares to $1.24 per share generated in the prior-year period, or more than a 5% increase. We were very pleased with management’s comments that brand initiatives are resonating well with consumers and that it has increased its presence in faster-growing geographies. Though performance in the US and Canada continues to languish as a result of weakness in the ‘Boys’ and ‘Preschool’ categories, the firm’s ‘International’ and ‘Entertainment and Licensing’ segments performed wonderfully. Image Source: Hasbro Sales in Europe, … Read more

Lone Ranger Can’t Ruin Disney’s Free Cash Flow

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Tuesday after the market close, media conglomerate Disney (click ticker for report: ) announced slightly disappointing third-quarter results. Revenue fell slightly short of consensus expectations, growing 4% year-over-year to $11.6 billion. Earnings grew a mediocre 2% year-over-year to $1.03 per share (excluding one-time items), which was actually slightly better than consensus estimates. Though headline numbers were weak, free cash flow for the third quarter surged 27% year-over-year to $2.7 billion, equal to 23% of total revenue. The big disappointment during the third quarter came from Disney’s Studio Entertainment business. Revenue declined 2% year-over-year to $1.6 billion, while operating income fell 36% year-over-year to $201 million. This comes as no surprise as The Lone Ranger is already considered a flop. Since … Read more

Disney Contract Extension Outshines Weak Revenue Growth at Hasbro

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Monday morning, Dividend Growth Newsletter portfolio holding Hasbro (click ticker for report: ) reported slightly weaker than anticipated second quarter results. Revenue declined 6% year-over-year to $766 million, well below consensus estimates. Earnings per share, adjusted for a one-time charge, also came in below consensus expectations, falling 12% year-over-year to $0.29. Year-to-date, free cash flow is up to 66% to $245 million, which equates to 17% of revenues (an excellent number). Though headline numbers weren’t quite as strong as anticipated, the market is focused on the contract extension Hasbro inked with Disney (click ticker for report: ) to keep Marvel and Star Wars products exclusive to Hasbro. We’re not surprised by the deal extension, but some market participants may have … Read more

Dividend Growth Portfolio Holding Hasbro Boosts Dividend; Cash Flow Remains Fantastic

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After pre-announcing weaker than anticipated fourth quarter results at the end of January, Dividend Growth Newsletter portfolio holding Hasbro (click ticker for report: ) updated investors with its final results. Revenues were down about 4% year-over-year to $1.28 billion, while earnings for the quarter were 13% higher year-over-year at $1.20 per share (net of restructuring charge). As a result, full-year earnings were $2.55 per share, down 10% compared to 2011. However, excluding restructuring charges and foreign exchange variations, earnings for the year were $2.91 per share—a slight increase on a year-over-year basis. As Valuentum members are well aware, Hasbro’s stock performance has been very strong as of late (and such equity performance doesn’t consider its hefty dividend payout). Although earnings were not amazing by … Read more

Star Wars Getting ‘The Avengers’ Treatment from Disney

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Entertainment giant Disney (click ticker for report: ) announced solid fiscal first quarter results Tuesday after the market closed. Revenues jumped 5% year-over-year to $11.3 billion, exceeding consensus estimates. Earnings fell 4% year-over-year to $0.77 per share, higher than consensus predictions. Disney’s results were solid, but we thought the most important takeaway came from CEO Bob Iger during an interview with CNBC. Iger confirmed that the firm will be making Star Wars movies that deviate from the story’s sequence of events. We believe this implies movies driven around certain characters and their respective origins or backstories. This is essentially what the company successfully accomplished with The Avengers, and we think the results could be even better, given the immense popularity … Read more

Mattel Posts Strong Fourth Quarter; Raises Dividend

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Toymaker Mattel (click ticker for report: ) reported solid fourth quarter results Friday morning that were slightly worse than consensus estimates. Revenue grew 5% year-over-year to $2.3 billion, producing adjusted earnings per share of $1.13, also 5% higher than the year ago period. These results outpaced those of competitor Hasbro (click ticker for report: ), which missed the mark when it preannounced weak fourth quarter results in late January. Both domestic and international markets drove strength at Mattel, as North American sales jumped 5% year-over-year on a reported-basis (4% excluding currency) and International sales increased 8% year-over-year on a reported basis (10% excluding currency). Asia was incredibly strong, with sales jumping 27% year-over-year, and we think the future looks bright … Read more