Hasbro: a stock nobody likes (but me!)

I first bought Hasbro in October of 2012 because it showed up on a list of companies that had a big dividend and they had consistently raised it.  I understood the product because I'd played with their toys as a child, bought them for my own children and now I'm buying them for my grandson. Monopoly, Play-doh, Playskool, GI Joe - plus a bunch of licensed products based on Star Wars, Spiderman and Sesame Street. 

This is a perfect example of what I've come to think of as a "low IQ investment."  A dividend that is significantly higher than what I can earn on the money market, a consistent track record of taking care of their shareholders by raising it - and it doesn't require an advanced degree in economics or technology to understand the stock.  If kids are going to continue to play with toys they can hold in their hands, they are probably going to play with Hasbro products.

But the best thing about Hasbro?  Nobody likes it.  Morningstar has a "hold" rating on it, as does Standard & Poor's.  Bank of America (Merrill Lynch) doesn't even bother to assign an analyst to follow it.  Everybody's decided this company - in an internet-based world - is yesterday's news and they've stopped caring - the exact same opinion they all held when I bought my first 200 shares 2 years ago.  And my position is up over 40% after expenses. 

I know it's counter-intuitive to get excited about a company that puts the professionals to sleep, that nobody rates "buy."  But think about it.  If everybody is already excited about a company, it's really hard to get a surprise to the upside.  Who is left to buy it?  We've seen this happen time and time again with top-notch companies.  Apple comes to mind as a great example.  It hit $800 a share (pre 6:1 split), all the news that came out about earnings, the dividend, their products was fantastic - and the stock still went down to $400 because everybody had already bought into the "Apple is the best company in the universe" scenario.  The time to buy a stock if you want to make the big money is BEFORE the analysts get excited, not after. 

Now we're heading into Christmas season and yesterday Hasbro announced they are partnering with Disney and Walmart (not bad partners) to introduce a new product that takes advantage of 3-D printing. 

"The SUPER AWESOME ME experience begins when the fan visits an in-store scanning station where a 3D face scanner captures their likeness to create a 3D model. At launch, fans can visit one of ten Walmart or two Sam’s Club stores and choose from Captain America or Iron Man to create a personalized 12” action figure. The SUPER AWESOME ME figure features a traditional 12” articulated plastic action figure body and a full color 3D printed head. Recommended for fans ages 4 years and older and available for an approximate retail price of $45, the SUPER AWESOME ME figure will be available for pick up at Walmart locations or ship to Sam’s Club customers in four weeks."

Come on - I'm not even a comic book fan and I'm cheap - but I'm dying to plunk down $45 to see what my grandson looks like as a 3-D ,12" version of Captain America. 

Even if it turns out Christmas shoppers don't love this idea, I'm stuck with a great dividend record and a package of iconic toy names that can continue to be re-imagined in ways that take advantage of changes in technology. Who cares what the analysts say?  Today I'm looking for cash to add to one of those rare, common sense companies that I can hold for years, confident that their seasoned management team will take care of the children who play with their toys as well as their shareholders - the way they have for generations.