Stockchase Opinions

Shane Obata Nintendo Company Ltd. NTDOY-OTC TOP PICK Jul 05, 2023

Japanese market has been very strong this year and becoming more shareholder friendly. Forward PE is about 20x, so it's not deep value. Heavily depends on console sales and it's well into that cycle, so could have negative sales growth for the next 2 years. Excited about IP synergies across divisions such as video games and movies. (Price target in Japanese Yen.) Yield is 2.86%.

(Analysts’ price target is $6489.47)
$11.330

Stock price when the opinion was issued

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COMMENT

Just looked at the results fairly recently in Cdn$ terms, and there is just no rhyme nor reason with what is going on. Some years it is huge profitability and other years it is big losses. He can get no fundamental comfort in terms of its performance. It has good cash reserves, so the dividend is probably safe.

DON'T BUY

The stock has had a nice rebound. The whole gaming space is on fire. This is becoming a spectator sport. They have great titles but it is a closed system. If they ever opened their system you would see the stock double. They are getting better online. He is still not convinced.

HOLD

The stock is acting well. The volume is not much. It has been acting well after the Pokey man thing. He would continue to own this.

COMMENT
Not a big fan of branded technology. A product launch story where you get a big upsurge in revenue (like EA) and they have to carry a lot of cash. A volatile cycle that moves too much for his taste.
BUY
Allan Tong’s Discover Picks NTDOY stock pays a 2.81% dividend yield and trades at a 17x PE, compared to 27x a year ago. Activision Blizzard pays only 0.51% and trades at nearly 24x. The Home of Mario does face competition from the PS 5 and the Xbox, but these are nothing new. As of this writing, NTDOY stock is trading $4 below its 52-week high, and it’s reasonable to predict that it will break that level this winter. Game on. Read 4 More Alluring Gaming Stocks for the Win for our full analysis.
TOP PICK
Founded in 1889 by painting playing cards! Leader in game consoles, mobile games, IP licensing. He added it to his fund portfolio today. Healthy pipeline. An unsponsored ADR, so a bit tricky to buy on its own. PE just under 14x. Yield is 2.21%. (Analysts’ price target is $11.21)
TOP PICK

A misunderstood story. Interesting valuation. Latest movie has done quite well. Always looking for ways to diversify revenue stream. Recurring revenue has boosted operating margin from 6% to over 30%, and that could continue to grow. 12x earnings, $13B in cash. Yield is 2.28%.

(Analysts’ price target is $11.21)
PAST TOP PICK
(A Top Pick Dec 21/22, Up 13%)

Business model dedicated to game consoles, mobile games, IP licenses. Fantastic labels. Moving towards subscriptions, a benefit in the long run. Keep holding, add around $11. Probably won't go much under $10.50.

(Analysts’ price target is $12.00)
PAST TOP PICK
(A Top Pick Apr 13/23, Up 22%)

Very strong business with sticky user base (kids and grownups love video games). Benefited from demand in Japan equities. New products (Switch) coming out which is good for profits. New content with movies will increase demand for products. Stock valuation cheap relative to peers. Good for long term investors - will continue to own shares. Shift in the business - very strong trends.