Nintendo Co., Ltd (ADR) (NTDOY.PK)

Reminds me of APPL. New products will win. Their unique user interfaces allow them to develop unique games that are appealing to a large crowd.

portefeuille2

stock is too low given the quality of the company, cash on balance sheet, low debt, and low PE.

Their gaming systems continue to be superb and ahead of the curve. Innovation is their power.

Track

There are some risks there with the competition, so they're going to have to perhaps roll out some realy good stuff!

I don't know why it is on sale, but I am buying.

The market is in a much needed correction from the oversold condition. Nintendo has SuperMario for the Wii coming out for the holiday season. With the Wii Fitness pack and SuperMario they are positioned to tap a wide range of gamers and families for the overall entertainment and physical fitness value of the Wii system. If you are economizing then buying a Wii, several games and the fitness board and other accessories is on par with a gym membership and online gaming membership.

Wonderful cast of characters to Brand, PE under 10, no debt, tons of cash.

Reasons to buy:

A) Video games experience little or no contraction in recessions, Nintendo's stock price has experienced a 60% decline since 2008 and has yet to gain any of it back while the market has gained back 20% from it's low.

B) It's a household name and continues to offer new innovative products

C) 5% Dividend, one of the best (if not the best) in the gaming industry

D) Low P/E

E) Little or no debt

Financials:

http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ric=NTDOY.PK&dataset=balanceSheet&period=A&currency=native

Reasons not to buy:

A) Other companies are getting into the occasional gamers and motion sensor market

B) Yen vs. Dollar will hurt US sales

I'd be interested to hear others

great products, including the wii fit (people want to have fun while being healthy).

xmas + oddly low current price.

TBA 2010 Endless Ocean 2(Wii) Arika(???)
TBA 2010 Golden Sun DS(NDS) Camelot Software Planning(3rd party partner)
TBA 2010 Metroid:Other M(Wii) Nintendo SPD(sub.Nintendo)/Team Ninja(sub.Temco)/D-Rockets(???)
TBA 2010 Pokémon HeartGold and SoulSilver(NDS) Game Freak(private)
TBA 2010 Sin and Punishment 2(Wii) Treasure(private)
TBA 2010 Super Mario Galaxy 2(Wii) Nintendo EAD(sub.Nintendo)
TBA 2010 Trauma Team(Wii) Atlus(public)
12/07/09 The Legend of Zelda:Spirit Tracks(NDS) Nintendo EAD(sub.Nintendo)
11/15/09 New Super Mario Bros. Wii(Wii) Nintendo EAD(sub.Nintendo)
11/??/09 Doc Louis's Punch-Out!!(Wii) Next Level Games(3rd party partnership)
10/04/09 Wii Fit Plus(Wii) Nintendo EAD(sub.Nintendo)
09/14/09 Maro & Luigi:Bowser's Inside Story(NDS) Alpha Dream(partnership)
08/24/09 Metroid Prime:Trilogy(Wii) Retro Studios(sub.Nintendo)
07/26/09 Wii Sports Resort(Wii) Nintendo EAD(sub.Nintendo)
05/19/09 Punch-Out!!(Wii) Next Level Games(3rd party partnership)
04/20/09 Excitebots:Trick Racing(Wii) Monster Games(???)
02/16/09 Fire Emblem:Shadow Dragon(NDS) Intelligent Systems(sub.Nintendo)

Wii HD

I like Nintendo not just because of their great, fun products for the family but for management's focus profitability. I think management's focus on running a financially sound, cash-rich business gives them a huge leg-up on Sony and Microsoft who lose money on every console they sell (although recently Sony and Microsoft are starting to breakeven for the first time as economies of scale start to kick in).

Nintendo generates about $2.3 billion in free cash flow which will continue to grow over time as they develop new products and reach more consumers around the world. Nintendo also has $8.1 billion of cash on the balance sheet with virtually no debt. I wouldn't be surprised if Nintendo uses all of that cash sometime in the future for one or a combination of the following: 1) a special dividend, 2) a significant dividend increase, 3) major share repurchase program, or 4) development of a more technologically advanced console on par with Sony and Microsoft. If option #4 came to fruition, Sony and Microsoft would be thrown on their heels. I'm not sure Nintendo is interested in catering to the hardcore gaming market, though.

Great products, great brand, great following, great demographic trends, great financials, great cash flows, great balance sheet, great management - seems to be a great CAPS pick.

Here are the main downsides, as I understand them:
-Nintendo has a PE of 15.1, not 8.26. CAPS's data is frequently wrong
-Currency issues. This hurts Nintendo, but Nintendo still made money the last two quarters.
-Competitor action: Microsoft and Sony have reduced the prices of their consoles, which would be much more difficult for Nintendo.
-Drop in revenues: Nintendo's YOY sales have fallen drastically. However, they're still making enough money to justify a higher price point.
-Cash flow: Nintendo lost a lot of cash in the last two quarters. However, most of this was from paying off debt, which isn't really indicative of a problem. Besides, Nintendo still has quite a bit of cash. But be wary of a canceled dividend in the future.

The good:
The Wii is still the cheapest console, the DS is still doing well, and people are generally more receptive to buying games for systems they already own than buying new systems.

In the longer term, Nintendo still has an amazing, innovative culture. I don't really see them failing to grow enough to meet the 15.1 PE in the next few years, especially if the economy picks up.

007 373 5963!

Extraordinarily cheap given the growth and the strength of the brand. Maybe this is a 'Japan' thing, but surely will not remain at 8x earnings going forward.

Outselling teh competition even at the pricepoint it launched at in 2006. When the Wii drops to $199 or $149 these things will FLY. Also have zero competition in the portable market and have a great software lineup coming out this holiday: Wii Fit Plus, New Super Mario Bros., and the recent Wii Sports Resort will all be some of the top sellers by year end. Get in at the bottom.