Should I Buy Nintendo Stock
Valuing Nintendo stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Nintendo's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
should i buy nintendo stock
Recently Nintendo has paid out, on average, around 2.83% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 3.89% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Nintendo shareholders could enjoy a 3.89% return on their shares, in the form of dividend payments. In Nintendo's case, that would currently equate to about $141 per share.
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This hasn't killed the stock though and we're really excited to see software pick up the slack in 2023 as Nintendo gears up to use being out-of-phase to their advantage and release a successor to the Switch potentially as early as 2024.
While these don't have the top-tier appeal that Zelda does, all three of them landing in 2023 should help Nintendo top 242 million units sold -- which would top last year's 235 million software units sold handily.
Nintendo is largely rated as neutral by analysts yet it pays a healthy bi-annual dividend. The most recent of which was $1.593 per share on NTDOY in July with the next expected in December. It also has an aggressive stock repurchase plan and $8.4 billion in cash on hand.
In the Q2 2021 investor letter of Ensemble Capital, the fund mentioned Nintendo Co., Ltd. (NYSE: NTDOY), and discussed its stance on the firm. Nintendo Co., Ltd. is a Kyoto, Kyoto, Japan-based consumer electronics company, that currently has a $65.4 billion market capitalization. NTDOY delivered a -14.68% return since the beginning of the year, while its 12-month revenues are up by 24.34%. The stock closed at $68.70 per share on July 21, 2021.
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Nintendo ADR offers a small dividend of just over one per cent, and the stock has been moving downward over the past couple of years after peaking in January, 2021. Now trading in the $10-$11 range, NTDOY had been as high as $16 early last year.
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Nintendo carried out its previously announced 10-for-1 stock split on Thursday aimed at reducing the price of one individual share to attract new investors to the more than century old Japanese gaming giant.
A number of major tech firms, including Apple and Amazon, have announced stock splits over the past few years. While stock splits don't fundamentally change the company in any way, they do make buying shares in the firm cheaper.
If you're thinking about investing in the Nintendo stock (TYO: 7974), you may be wondering whether now is a good time to do so. In this short analysis, we'll be taking a quick look at the current state of the Nintendo stock and whether it might be worth considering as an investment option. Please keep in mind that this is not a comprehensive analysis of the company's finances, but rather a brief overview of the stock's potential value at this time. Let's get started!
In general the stock tends to have very controlled movements and with good liquidity the risk is considered very low in this stock. During the last day, the stock moved $0.120 between high and low, or 1.25%. For the last week the stock has had daily average volatility of 1.49%.
Since the stock is closer to the resistance from accumulated volume at $9.91(2.27%) than the support at $9.43(2.68%), our systems don't find the trading risk/reward intra-dayattractive and any bets should be held until the stock is closer to the support level.
Several short-term signals are positive, despite the stock being in a falling trend, we conclude that the current level may hold a buying opportunity as there is a fair chance for stock to perform well in the short-term. We have upgraded our analysis conclusion for this stock since the last evaluation from a Sell to a Buy candidate.
Nintendo continued to decline at a faster pace than most equities over the past quarter. We even gave them the nickname "Nintenlow" at our PMC offices. With $9/share in net cash and coming off their first fiscal loss in 30 years, we strongly believe that we are past the worst part of the trough in their revenue cycle. Of course, Nintendo must have a strong showing at E3 and follow through with a great Wii U launch later this year to bring any sense of confidence back to the shareholder base. Until we get some certainty regarding the Wii U, the stock will continue to be whipsawed by the bears. This remains our best investment idea in the videogames industry and as a result we are maintaining our super mega buy rating on the stock. The company is trading for book value, which is incredibly rare for entertainment companies with such great brands.
Apple's stock chart went temporarily parabolic and was incredibly overbought on relative strength indicators when it hit a resistance point at $644/share. We still believe Apple offers tremendous upside from here. The stock was used as a funding currency in May as Facebook mania reached its feverish pitch. The stock declined from $644 to $522.18 before its recent rally back to the upper $570s. Clearly we are entering into a volatile period for equities, but Apple's share price has tremendous earnings growth to back it up. It will begin to pay a dividend soon which will have a higher annual yield than the 10 year US Treasury Bond. We don't know what our readers think, but we have more faith in Apple's balance sheet than the US government's.
The risk reward on EA is certainly very compelling at this point. The stock hasn't traded this low since May of 2000. They currently have a $4.23 billion market cap while sitting on $1.85 billion in cash. They have $539 million in debt, but that still leaves them with over a quarter of the company's value sitting in cash or short term securities. It's also got an incredibly low price to sales ratio of 1.04; a number that has previously been as high as nearly 6. The market has written off companies that they don't view as being a part of the social/cloud future, and they've dumped every good old fashioned gaming company as a part of that trend. Oddly enough, in EA's previous quarter, digital revenue amounted to 30% of total revenue and is growing rapidly. It seems the market didn't get the memo.
For the last couple years our general rule of thumb has been to buy Gamestop under $19. It's dropped almost 18 percent since we downgraded it in January. The stock has been vacillating back and forth under $19 for about a week and we think it's now time to upgrade it back to a Buy. Our article is called Game Trader, and sometimes investors have to be tactical with their entry and exit of stocks. GameStop is definitely a battleground stock and investors can expect more volatility to come in shares. GameStop will benefit from the next generation of hardware consoles coming out. With the Wii U coming out later this year there is a compelling draw for consumers to shop and pre-order at GameStop. We think that it is unlikely for the next generation Sony and Microsoft consoles to be download only, or not support used games. 041b061a72