LeapFrog Enterprises Inc (ticker: LF)

[orangetea]

Sector: children toys/learning tools

It is rather cheap
52w low $7.40
52w high $11.95
Currently $7.74
Book $5.22
Net profit margin 13.46%
No debts

This is a highly shorted stock. But if profit continues to grow, shorts have to cover.
http://saxangle.com/2013/02/best-short-s...p-frog-lf/


Some funds hold this counter
http://www.nasdaq.com/symbol/lf/institutional-holdings

Data Source
http://markets.ft.com/research/Markets/T...s?s=LF:NYQ

Additional reading
http://abitofvalue.com/2013/06/05/leapfrog/

About LeapFrog
LeapFrog Enterprises, Inc. (LeapFrog) is a developer of educational entertainment for children. The Company's product portfolio consists of multimedia learning platforms and related content and learning toys. The Company has developed a number of learning platforms, including the LeapPad Explorer (LeapPad) learning tablet, the Leapster family of multimedia learning platforms and the Tag and Tag Junior reading systems, which supports a library of content titles. The Company has created hundreds of interactive content titles for its platforms, covering subjects, such as phonics, reading, writing and math. In addition, it has a line of stand-alone learning toys. LeapFrog's products are connected to its online LeapFrog Learning Path (the Learning Path), which provides personalized feedback on a child's learning progress, and offers product recommendations. During the year ended December 41, 2011, the Company launched App Center platform and LeapPad personalized learning tablet.

[opmi]

Leapfrog is knowledge universe spinoff. If I rem correctly.

[rogerwilco]

i like leapfrog and still holding some positions however currently majority of leapfrog revenues come from its kid targeted tablet and its content. The bad news is the heavy competition from fellow kid-targeted tablet manufacturers (V-tech, Fuhu+DreamWorks, Toys r us, etc) AND general purpose tablet manufacturers (Apple, Samsung and other android tablet manufacturers, and Amazon).

[specuvestor]

V-Tech started by making OEM for Leapfrog last decade

[orangetea]

LF results did not meet expectation from last year end sales.
Peer wise, big players like Mattel (MAT) and Hasbro (HAS) also reported poor sales.


Vested in LF and MAT

=========

Why LeapFrog Enterprises, Inc. Shares Were Sinking

By Jeremy Bowman | More Articles
February 13, 2014

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LeapFrog Enterprises (NYSE: LF ) were getting left behind today, falling as much as 14% after the educational toy maker posted yet another disappointing earnings report.

So what: As many retailers had complained of earlier, LeapFrog CEO John Barbour called the holiday sales environment "very challenging." Sales plummeted 24% to $186.7 million against estimates of $215 million due to steep discounting by retailers, the shortened holiday shopping season, and retailers' inability to keep the right products in stock at the right time. Adjusted earnings in the key quarter likewise tumbled to just $0.2 million or breakeven per share, well short of estimates at $0.14 and down from $0.38 a year ago.

Now what: As if those numbers weren't bad enough, LeapFrog's guidance was equally disheartening. Because of weak fourth-quarter sales, inventory is much higher than expected, and CFO Ray Arthur said that that and current weak retail conditions "would continue to negatively impact sales in the first and second quarter and also for the full year." Management expects first-quarter sales to be 40% lower than a year ago and sees slight growth in full-year sales at a range of $554 million to $580 million against 2013 sales of $554 million. It also projects EPS to fall from $0.30 to $0.18-$0.25 for the year.

I'm a shareholder in LeapFrog and still believe the company offers compelling products that should eventually lead to meaningful profit growth. Still, this report is painful to absorb for investors. If LeapFrog cannot meet the dramatically lowered guidance it's provided for the year, it may be time to pull the plug on the tablet maker.

[rogerwilco]

I'm a shareholder in LeapFrog and still believe the company offers compelling products that should eventually lead to meaningful profit growth. Still, this report is painful to absorb for investors. If LeapFrog cannot meet the dramatically lowered guidance it's provided for the year, it may be time to pull the plug on the tablet maker.

Orangetea, i'm also a shareholder of LF who is disappointed in LF recent result. So far they try to defend their premium pricing position by investing more in their content but due to heavy competition they have introduced a sub $99 LeapPad last August.

imho their medium/long term strategy seems to be shifting to more of a content company than a kid hardware company. They are also planning to enter a new category in late 2014

[orangetea]

I'm a shareholder in LeapFrog and still believe the company offers compelling products that should eventually lead to meaningful profit growth. Still, this report is painful to absorb for investors. If LeapFrog cannot meet the dramatically lowered guidance it's provided for the year, it may be time to pull the plug on the tablet maker.

Orangetea, i'm also a shareholder of LF who is disappointed in LF recent result. So far they try to defend their premium pricing position by investing more in their content but due to heavy competition they have introduced a sub $99 LeapPad last August.

imho their medium/long term strategy seems to be shifting to more of a content company than a kid hardware company. They are also planning to enter a new category in late 2014

Thanks Roger.
There are lots of shorts in LF.
So long as biz picks up, these shorts will cover.

Here's the SA article you posted

"Our strategic priorities fall mainly into the following four buckets. One, major new platforms and innovative new products that diversify our portfolio. Two, continued innovation and expansion of our current categories. Three, geographical expansion, building on the success we have achieved in France. And four, significant infrastructure investments that will help us to become more efficient and scale as we grow. In recent customer pre shows and private toy fairs, we launched a major new platform in a new category that we do not currently participate, in some very innovative new products for 2014, that all deliver incredibly fun learning for children. Response to these introductions from our customers was very positive.

In March, Lionsgate and LeapFrog will launch the first of four new Letter Factory Learning Video with the next generation of our popular frog characters. The original Letter Factory continues to be one of the most highly consumer rated pieces of children's animation. Over 2.5 million copies have been sold to-date. Our collection of learning videos is very popular on Netflix. We continue to explore additional animation opportunities. For 2014, we will expand and refresh our best selling content libraries with a whole bunch of exciting new cartridges, books, and apps. Last year we did not have a sub-$99 tablet on shelf in the US and other markets until August, and we believe we lost sales to lower priced alternatives."

[rogerwilco]

Hi Orangetea, beside LF you might want to take a look at Nintendo (NTDOY:US) as well. Their shares are pretty depressed since the Wii U lackluster sales became widely known however i look forward to their medium (utilization of character IP) and long term plan (expanding into healthcare)

Iwata's Presentation
http://www.nintendo.co.jp/ir/en/library/...index.html

QA
http://www.nintendo.co.jp/ir/en/library/...index.html

[orangetea]

Leapfrog products
Violet/scout are pretty neat.
My kids love them.
Can customise their speech to call kids name, customise rythmes and music using a mac or pc.

[orangetea]

Analyst says Mattel deal could make LeapFrog takeover more likely
March 3, 2014

Mattel's (MAT) recent takeover of a construction toy company could increase the chances that LeapFrog (LF) will be acquired, Roth Capital wrote in a note to investors earlier today. Leapfrog develops educational toys, including computer tablets. WHAT'S NEW: Mattel's $460M acquisition of Mega Brands could increase the likelihood that LeapFrog will be acquired, Roth Capital analyst Dave King wrote. Mattel's competitors, including Hasbro (HAS), could respond to Mattel's move by making their own acquisition, King contended. Moreover, large toy makers may be interested in further penetrating the children's tablet market, contended the analyst, who had previously written that LeapFrog could be acquired. King is cautious on LeapFrog's fundamentals in the near-term, but continues to be upbeat about the company due to what he sees as its leading brand, attractive valuation, and status as an eventual takeover target. He kept a $7.50 price target and Buy rating on the shares. WHAT'S NOTABLE: On February 12, LeapFrog reported much weaker than expected first quarter results. PRICE ACTION: In late morning trading, LeapFrog fell 0.7% to $7.23.