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Nintendo Co. Ltd. Message Board

  • schreige schreige Dec 19, 2007 6:33 PM Flag

    Nintendo Fundamentals

    So I've been researching the nintendo stock info, which is kind of a pain in the ass since it isn't really on Yahoo Financials.

    A couple points. There are something like only 35,000 shareholders of Nintendo. Compared with 630k for sony, and 150k for microsoft. 41% of outstanding shares is owned by foreigners, 59% in japan. For the Tokyo exchange you have to buy Nintendo in lots of 100 shares. That means a Japanese investor has to invest at least $65K USD to even invest in nintendo.

    What this means I don't really know, it seems that Nintendo is primarily owned by institutions, and not a lot of ordinary shareholders own it because of high entry prices (Japan), or it being harder to trade than most stocks in the US.


    http://seekingalpha.com/article/43310-who-is-buying-nintendo-stock

    According to Google Finance, Nintendo has a Market Cap of
    about 80 billion USD. It has EPS of about $4, and a P/E of 17.5.

    So on one side, the market cap seems huge, Sony is only 54 billion. However Sony, with roughly the same number of shares, only has an EPS of 2, and a P/E of 28.

    So for Nintendo to match the P/E of sony, it should have a price of 112.

    Potential growth seems promising as well. The Wii actually sells half the hardware, and 40% of the software compared to the DS. For every DS sold, 3 titles are sold (rough metric based on the last quarterly report). Currently the Wii has sold 4.5 titles for each unit sold (and it has not been around as long for early owners to buy titles).

    Also, Nintendo is sitting on about 7 billion in cash, added 1 billion in 2007, and has a history of buying back shares.

    http://www.nintendo.co.jp/ir/pdf/2007/070725e.pdf

    Anyhow, I'm not completely sure how to parse these numbers, but it feels like Nintendo is currently cheap compared to other companies, has a lot of upward growth potential since the Wii and DS are currently selling out quickly, and seemingly the Wii is experiencing decent software sales/unit (and since most software is homegrown, has high profits).

    It feels what is holding the stock down is the difficulty in becoming a shareholder, and the low number of people trading the stock.

    Also, unlike Sony Nintendo is probably more of a cyclical play since it is a 1 trick pony, whereas Sony has all sorts of way to make money.

    Anyhow, just my thoughts on the stock, I personally think it will jump when the next set of numbers come out.

    If anyone has a good central place to find the quarterly reports please post, as they're a pain in the ass to track down right now.

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    • Nice post with data.
      Nintendo is valued at 80B
      Both APPL and INTC are valued at 160B.

      I like Nintendo because they have been runover by
      Sony once. They could be again be runover if they take a nap. They learned to be a profitable company at all the times.

      The questions:
      Can Nintendo keep this incessant sales
      going for another year without swamping the market with over production? If so, where can the stock price end up?
      Sony stock price has not fallen because of PS3 failure.
      Sony was able to keep afloat with PS2. Third party
      titles!!!

      Can Nintendo gain allies in third party publishers?

      Do they have a third front to go along with DS and Wii product lines?

    • I agree it is difficult to find the numbers on Nintendo. Re: P/E I will add that if you click on Yahoo Analyst estimates it shows 2008 estimate of only $2.55

      $70/2.55 would give Nintendo a forward p/e of 27.45. I'm not sure how much cash they have per share but that would not be factored in and I am sure guidance is conservative with Nintendo.

    • it almost seems like the stock price is being artificially held down

      these are the justifications:

      1. Weak US economy--yes, tell that to the people standing in line for a chance to get a wii

      2. Comeback of PS3-- sure if Sony drops the price every week there may be some competition

      3. Stock price has all expectation built in-- Just wait and see wii fit , smash brothrs and mario kart sales.

      If this were on the NY stock exchange we would be looking at $100+ a share

 
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