Will This Stock Leapfrog The Others?

This week we’re bringing you a brand new On The Radar Report. As you know we seek to profile some of the most exciting and explosive stock investments around… and this company has HUGE potential.

We think you should take a closer look at:

 

LeapFrog Enterprises (NYSE: LF)

QUICK FACTS
Ticker:                                        LF
Industry:                                     Toys & Games
Recent Price:                              $4.44
Market Cap:                                $288 million
Average Volume:                         142,864
Dividend Yield:                             N/A
Website:                                     www.leapfrog.com

 

COMPANY DESCRIPTION

LeapFrog (LF) specializes in educational toys for young children, ages 6+ months to nine years old. They combine cutting edge technology with a proprietary curriculum developed to create entertaining and educational toys. The company’s toys are sold in 44 countries. Better yet, the company has been able to place LeapFrog toys in over 100,000 U.S. classrooms.

Most products are sold through national retailers and specialty stores. By getting products into the hands of children at an early age, they ensure that the next generation of learning toys are added to the collection. It creates a recurring stream of revenue for the company.

Products include everything from one of the most technologically advanced teddy bears to interactive books and even child style laptops.

 

FINANCIALS

LeapFrog’s financials are finally starting to “LEAP” ahead!

While toy sales suffered during the economic downturn, the company was able to adjust expenses accordingly. Their first quarter sales speak volumes. Sales for the quarter were an astounding $40 million… not bad considering we are still exiting a recession.

Remarkably, the company reported gross margins of 29.6%

While LeapFrog did post a loss, management believes they will still be able to reach their net income per share targets of $0.15 to $0.20 for the year. The company is still well capitalized with about $77.5 million cash on hand.

 

RECENT EVENTS

LeapFrog caught the eye of Barron’s who recently recommended 10 debt free stocks with strong profits in 2010… of course LF was one of the 10.

Earlier in the year the company released a new “app” for the iPad, iPod, and iPhone. The “Scout’s ABC Garden” helps teach letters and letter sounds to young kids.

 

MANAGEMENT TEAM

The current management team consists of:
William B Chiasson – CEO
Mark A Etnyre – CFO
Michael J Dodd – President and COO
Michael Y Chai – Executive Vice President

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart courtesy of stockcharts.com

LF’s stock is rallying above the 50-day moving average and nearing the 200-day. We’re seeing a positive technical indicator with the 50-day moving average heading slightly higher and the stock trading well above those levels.

 

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