I used to own some of the Nintendo (OTC: NTDOY) ADRs that trade over-the-counter. I bought them last summer ahead of the holiday season at around $62 a share and sold the position last month for about $67 a share, intent on raising some cash in one of my accounts for better buying opportunities. I should have sold when the shares hit their 52-week high of approximately $78, but I didn't -- kills me, but I've moved on (I think).
But with the recent sharp drop in the shares, should investors be taking a look at Nintendo? I know I've been keeping an eye on the price action. Nintendo is definitely a major player this time around in the console cycle; Sony (NYSE: SNE) used to be king of the gamers, but now the sales/cultural buzz is definitely in the Mario-maker's court. Not only is the Wii a major catalyst, but you have to respect the incredible popularity of the DS handheld system.
My gut is telling me that Nintendo hasn't yet bottomed out. Identifying a bottom is a fool's game, of course, but I'd like to see Nintendo develop a more stable base before I buy in again. For now, I own Activision (NASDAQ: ATVI) and Take-Two (NASDAQ: TTWO) as plays on the videogame growth story, but I am interested yet again in Nintendo.
Disclosure: Steven Mallas owns Activision and Take-Two, and is mulling a purchase in Nintendo.
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Reader Comments (Page 1 of 1)
2-13-2008 @ 12:55PM
cmonterroza said...
Listen, right now Tech isn't where you want to be. I actually traded NTDOY, ATVI, TTWO and MSFT almost exclusively for a year and a half. I think I got a good idea of how the stocks function. As for Nintendo, I bought it at its second lowest price during the whole of 2007 and sold it after it released it's earning in July. I actually sold it about the recorded prices on the charts. I got back in for a little action around 59 but sold out at 57. I have a strong conviction this stock was pumped until the new year. Now its going to get hammered for at least another 3 months. BTW, TTWO expects to make something like $400 million more from GTA 4 than they had estimated last year. Of course they could pull Duke Nukem out of nowhere and make that, but be careful. Also, ATVI right now is for arbitragers not growth buyers. Be careful if the deal falls through due to funding problems.
2-13-2008 @ 3:35PM
Jonathan Figueroa said...
Cmonterroza, what makes you think NTDOY is going to continually get hammered. For the past couple of months it has been reporting an increase in sales for the DS and the Wii. As a matter of fact the Nintendo Wii has extended its consumer market not only to young children and older males, but also to the elderly, women, and I even read a Forbes article where they are talking about Doctors who buy the consoles to perform therapy on patients. NTDOY is the next big thing and even tho its been dropping in the past weeks, yet i've been seeing some good reports on the technology sector these past couple days. People should watch NTDOY closely and execute when they expect to see it at its lowest, because it bound to climb back up the charts again. Christian has been following NTDOY tho for a while, trust me I know hahaha.
-Figz
2-14-2008 @ 6:34PM
boulin99 said...
I think the fears for nintendo are
#1 the Craptastic Dollar
#2 Domestic fiscal instability in japan.
Nintendo actually raised their expected sales #'s for this quarter, but didn't raise their expected profit, because they are going to sell more total games in the US, but for less value per game. thats because the dollar is turning into the new peso.
Plus, I keep reading about how "analysts" are wary of the Japanes market, because there seems to be a lack of leadership in protecting it.