My eldest child spent a lot of her young childhood with a LeapPad on her lap. Introduced in 1999, the LeapPad was an overnight hit that catapulted the maker of the reading device, LeapFrog (NYSE: LF), into stardom with a rocket of a stock to boot.

According to the company, LeapFrog went on to sell 30 million LeapPads and related products worldwide, as well as more than 70 million companion books. In 2003, the LeapPad family of products brought in $330 million, nearly half of LeapFrog's revenue. Since then, the company has suffered at the hands of lower-priced competitors, lack of another blockbuster hit (although the firm has has launched critically-acclaimed products), and video games.

So, today's New York Times article, "LeapFrog Hopes for Next Hit with Interactive Reading Toy", may be what the company needs to help an ailing stock. The Tag certainly looks cool. It is a thick, white-and-green plastic stylus that turns paper books into interactive playthings. Like the LeapPad, kids can tap a word with it and the stylus reads the word, or its definition, aloud. They can tap on an image to hear a character's voice come alive.

The breakthrough of the Tag is that it doesn't require the special, spiral-bound books that the LeapPad did. Instead, all the smarts are packed into the stylus itself and it uses books whose pages are imprinted with invisible dots that allow a small infrared camera at the tip of the Tag to recognize words or images on the page.

The result? The Tag is more portable and less clunky than its predecessor. The article quotes the CEO of LeapFrog, Jeffrey Katz, as saying, that the launch of the Tag is LF's "biggest launch ever."

LeapFrog needs the Tag to work. The stock is off almost 90% off its 2003 highs. With restructuring of the company, and a new web strategy which helps parents track their children's progress, LeapFrog is betting that they've found a winning strategy. Value investors may want to take a deep look at this turn-around story.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.