Hasbro rises from the dead

Turning toys into profits Wall Street Connected Profit Like The Pros Brought to you by: Dear subscriber, In 2018, many investors expected Hasbro (HAS) to die a slow death. Who wouldn’t after watching revenues plummet and multiple failed takeovers from Mattel (MAT) to Lionsgate (LGF.A). Yet, the company managed a turnaround few expected. Yesterday’s earnings built on a remarkable performance from 2020. Their performance led Hasbro to be of the top five stock searches in our TrackstarIQ data. But does it have the juice to keep going? Revenue turnaround To give you some context on the transformation, take a look at the revenues over the last decade. Sales steadily climbed through 2017 and margins improved. In 2018, the company was hammered by Toys’R’Us bankruptcy as they scrambled to find outlets for their products. The impact was so severe that it lingered well into 2019. And then things changed. Margins and revenues substantially improved. Total transformation Today, they operate three business segments: - Consumer products (52.1% of revenues) - Wizards of the Coast & Digital Gaming (30.8% of revenues) - Entertainment (17.1% of revenues). Yesterday’s results saw earnings come in more than double estimates with [revenue growing 54% YOY (partly due to the pandemic.)]( Hasbro’s total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY which are included in Franchise Brands in the table above, was $519M for Q2 2021, up 63% vs. $319M for Q2 2020 and $885M YTD 2021, up 34% vs. $659M YTD 2020. Growth in franchise brands really stood out for the year-over-year performance. That comes in spite of solid gaming sales in 2020 due to lockdowns. Hasbro made some strategic decisions such as partnering with Paramount to enhance storytelling and content capabilities, investing in Boulder Media (Hasbro’s animation studio), as well as support Disney+ Star Wars and Marvel. The company boasts a robust balance sheet that’s seen long-term debt decrease year after year. Plus, it offers a healthy 2.62% dividend payout. Stacking Hasbro up against Mattel, the two stocks are priced similarly from a price-to-earnings ratio (P/E) ratio. However, Hasbro boasts higher margins as well as recent growth. Our hot take With a current P/E ratio of 33x the prior 12 months’ earnings and a forward ratio of 30x, it’s not exactly cheap. It’s unlikely the company can keep the current pace of topline growth. However, with analysts predicting single-digit percentage increases, there could be some serious upside potential. Sponsored [Get Convenient Access to Bitcoin Right From Your Brokerage Account]( The Osprey Bitcoin Trust ($OBTC) offers easy access to bitcoin right from your brokerage account or IRA. It’s the lowest cost bitcoin fund in the U.S. No wallets or keys required. [Check Us Out HERE]( What we’re watching [Wall Street Connected: Boeing]( A look at aeroplane, rocket and satellite manufacturing giant Boeing. [Watch Now]( OUR RECENT POSTS [How far can Tesla go?]( Earnings paint a rosy picture [Read more]( [Invest in car seats?]( Why not? [Read more]( - The Editorial Staff # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](#). View our privacy policy [here](#). Copyright ©2021 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](