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PaxtorReborn (92.96)

Following Ultralong into this one. Long on MCZ

Recs

8

October 09, 2009 – Comments (3) | RELATED TICKERS: MED , CAT , ZZ

I'm following Ultralong into his Madcatz foray.  You can see his justification here: 

Better know a stock 11

Read his pitch.  What I'm writing here is just supplemental

My reasoning: The fundamentals and their steady, solid line of peripherals.

Peripherals

I'm not even really into gaming, yet I've found 3 of their products around my house.  A 3rd party Playstation controller and two other Saitek PC controllers (madcatz recently aquired Saitek).  These guys are clearly the go-to controller makers for 3rd party game accesories.  When you look at their website you see the names: rockband, EA sports, Resident Evil, street fighter, wii fit, call of duty, etc.... Huge properties that have let MCZ use their licenses.

Even at the bottom of a recession, people arent going to stop gaming.  MCZ's third party controllers work well and are cheaper than their proprietary counterparts; a plus in a down economy.

I did a little market research on Amazon and their products - especially those pertaining to Rock Band - are doing very well in sales.  

Fundamentals

Read  Ultra's article.  He pretty much summarizes the attraction.  I should note, the yearly loss sustained last year was due to the aquisition of Saitek and not sales.  They are a pretty solid little company.

3 Comments – Post Your Own

#1) On October 09, 2009 at 12:29 PM, WillSurfForFood (53.83) wrote:

I know almost nothing about MCZ but there are many questions about the business. They seem to make devices for game systems that essential get commoditized, they are great until someone else comes along and makes something better or cheaper. Will they ever be able to expand margins on the tings they produce? Do they have anything that  gives them a lasting competitive advantage over the competition? Most tech companies that don't absolutely dominate a market are one or two bad decisions away from getting waxed by the competition. If they make a cool controller can't someone else come along and essentially copy it? How much cooler can they make controllers than everyone else? Do they have to keep coming out with really innovative stuff just to stay ahead and can they? I write software for a living but I typically don't invest in tech.

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#2) On October 09, 2009 at 2:33 PM, PaxtorReborn (92.96) wrote:

Well, getting beat by the competition is a danger that any company faces.  The ipod is essentially an Mp3 player; hundreds of companies make them.

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#3) On October 09, 2009 at 3:09 PM, chk999 (100.00) wrote:

Interesting. Volume is a lot higher than I thought it would be for such a small company. This one is worth thinking about.

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