How great of an upside does LF have? As a parent of a preschooler, I have recently become aware of LF products. However, I have noticed a tremendous rise in the stock price over the past several months. Do you think LF will pullback or full steam ahead?
I am impressed with the financials but I did notice a high amount of insider trading -- all sells. Any particular reason why?
Insider sales are compensation levelers at LF. Most of the executives come from another company that produced the touch pad technology begind the leap pad. They were offered stock for their company instead of cash. These shares are just coming into 100% vested status after over 5 years. Theses sales aren't indicators od management disatisfaction.
As far as an upside is concerned, I'm very excited about the next 6 months. An entire new line of products are coming out this Fall and with no new products in the line up last quarter, LF lost the smallest amount in that quarter in their history. Most toy companies make their money in the 3rd and fourth quarter and losr in the first and second as they spend on R&D. LF was way ahead of projection in the 1nd quarter and has stated that they are even father ahead for the 2nd quarter. I expect LF to post a profit on July 24th. If this happens, the stock will head to upwards of 40. We reached 34.5 on last quarters numbers until ML "downgraded" due to valuation. Givne LF's history of underpromising and overdelivering, I suspect the next 180 days will belong to the longs.
The company's new product rollouts schedule to be introduced this fall include 3 new platforms, 2 new learning videos, and several software additions. The company anticipates over 40% increase in retailer shelf space which is expected to result in a sizeable top-line boost this year, while the full effect on earnings should be evident by mid 2004. Given that Leapfrog has no debt and has displayed efficient cost management the increase in revenues will likely permit higher profit margins.
Thanks for the information. I assumed that there had to be a valid reason for the insider sales being the balance sheet looks so good.
I will probably take a position in this stock prior to earnings announcement, for now I will follow the stock day by day to see what will be the best buy in price. Since the downgrade it has come back some.