2 replies to "Add a New Toy to Your Portfolio: Hot Stock Commentary"
Brian
January 20, 2015
Morningstar rates HAS as carrying twice as much debt as the Industry average and revenue growth has substantially under performed the Industry average…Could you please comment on these two statistics…Thanks Brian
Kyle Guske
January 21, 2015
Brian thanks for commenting. While the total debt is elevated, much of it is long-term, with expiration dates ranging from 2017-2044. Hasbro has generated over $1.4 billion in free cash flow over the past four years, much of which is reinvested into the company. Because of the company’s free cash flow generation, we are not concerned about the debt dragging down future company results. It is something to watch for though, and must continue to be managed accordingly.
Concerning revenue growth, it has lagged, however 2014 was a year of strong revenue growth for Hasbro. Despite growth below industry averages, Hasbro is becoming increasingly more efficient, growing their NOPAT margins every year since 2008. With revenue growth returning in 2014, along with the upcoming Marvel, Star Wars, and Disney Princess franchises, we believe 2015 and beyond will carry on the revenue growth and profit growth seen in 2014.
2 replies to "Add a New Toy to Your Portfolio: Hot Stock Commentary"
Morningstar rates HAS as carrying twice as much debt as the Industry average and revenue growth has substantially under performed the Industry average…Could you please comment on these two statistics…Thanks Brian
Brian thanks for commenting. While the total debt is elevated, much of it is long-term, with expiration dates ranging from 2017-2044. Hasbro has generated over $1.4 billion in free cash flow over the past four years, much of which is reinvested into the company. Because of the company’s free cash flow generation, we are not concerned about the debt dragging down future company results. It is something to watch for though, and must continue to be managed accordingly.
Concerning revenue growth, it has lagged, however 2014 was a year of strong revenue growth for Hasbro. Despite growth below industry averages, Hasbro is becoming increasingly more efficient, growing their NOPAT margins every year since 2008. With revenue growth returning in 2014, along with the upcoming Marvel, Star Wars, and Disney Princess franchises, we believe 2015 and beyond will carry on the revenue growth and profit growth seen in 2014.
-Kyle Guske