Needham & Company on Leisure & Lifestyle/Toys: Cruel Yule? Toy Stocks May Be Set Up For Weak December
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Price: $103.70 -0.13%
Rating Summary:
45 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
45 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Needham & Company on Leisure & Lifestyle/Toys: Cruel Yule? Toy Stocks May Be Set Up For Weak December
Analyst, Sean McGowan, said, "We are sounding a note of caution for investors regarding prospects for toy stocks over the next month. History has shown that December is often a month in which toy stocks underperform broader markets, especially when they’ve been strong in the preceding months. In addition to this “technical” observation, this note covers a number of other considerations we believe investors should keep in mind, including potentially difficult shipping comparisons to last year, the possibility that Black Friday sales strength has come at the expense of December, and Wal-Mart’s success in recapturing market share with layaway."
"Layaway drawing traffic to Wal-Mart (NYSE: WMT). The big three toy retailers (Wal-Mart, Toys R Us and Target (NYSE: TGT)) are all promoting heavily and discounting heavily, but Wal-Mart’s layaway plan this year appears to be working effectively to allow the retail giant to recapture some lost share at the expense of its rivals."
"Post-Labor Day rallies have often been sell signals. Toys stocks have not been super strong this year, but have generally outperformed the broader market. For the period 9/1 through 11/30, the group performed quite
well; in the past, a pre-December run-up has often been a precursor to significant underperformance in December."
"Continue to recommend Hasbro (NYSE: HAS), Mattel (NYSE: MAT) and Leapfrog (NYSE: LF) for the longer term. Via separate note, we are lowering our rating on LF from Strong Buy to Buy, as its strong recent rise has left it with less upside than we normally require for Strong Buy rated stocks."
Analyst, Sean McGowan, said, "We are sounding a note of caution for investors regarding prospects for toy stocks over the next month. History has shown that December is often a month in which toy stocks underperform broader markets, especially when they’ve been strong in the preceding months. In addition to this “technical” observation, this note covers a number of other considerations we believe investors should keep in mind, including potentially difficult shipping comparisons to last year, the possibility that Black Friday sales strength has come at the expense of December, and Wal-Mart’s success in recapturing market share with layaway."
"Layaway drawing traffic to Wal-Mart (NYSE: WMT). The big three toy retailers (Wal-Mart, Toys R Us and Target (NYSE: TGT)) are all promoting heavily and discounting heavily, but Wal-Mart’s layaway plan this year appears to be working effectively to allow the retail giant to recapture some lost share at the expense of its rivals."
"Post-Labor Day rallies have often been sell signals. Toys stocks have not been super strong this year, but have generally outperformed the broader market. For the period 9/1 through 11/30, the group performed quite
well; in the past, a pre-December run-up has often been a precursor to significant underperformance in December."
"Continue to recommend Hasbro (NYSE: HAS), Mattel (NYSE: MAT) and Leapfrog (NYSE: LF) for the longer term. Via separate note, we are lowering our rating on LF from Strong Buy to Buy, as its strong recent rise has left it with less upside than we normally require for Strong Buy rated stocks."
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