Readers of this space know that the retail sector is not my preferred investment area, but there are exceptions, and Hasbro (NYSE: HAS) is one.
In general, analysts see flat-to-slightly declining revenue for FY2009 for HAS, due to the "frugal consumer" era in the United States. Still, I'd argue that the forecast could be a tad low.
New product introductions, a decent tailwind from the summer movie season's toy connections, and likely market share gains is selected categories should get shares moving slightly north. A U.S. economic recovery will brighten the picture for FY2010. The First Call FY2009/FY2010 EPS estimates for HAS are $2.10 to $2.13.
Hence, I'm putting Hasbro in the category of a "get ahead of the pack" play, with modest downside exposure, given the reasonable P/E, aided by a tight sell/stop loss.
Stock Analysis: Hasbro is a moderate-risk stock. Consider buying a 25% position in HAS now; then buy another 25% in four months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your HAS position before October 2009. Sell/stop loss if you were to buy shares in this company: $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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