I don't really know how this FROG has gotten away from this website for so long. Maybe because my kids are getting older and they don't play with the electronic learning games....anyhow, LeapFrog made the best percentage gainers list and deserves a spot on this site. As always, I must remind you to consult with your own investment advisor before making any investment decisions based on what I say on this website.
According to money.cnn.com, LeapFrog (LF) "...is a designer, developer, and marketer of technology-based educational products and related proprietary content, dedicated to making learning effective and engaging." Sounds like an advertisement doesn't it?
Anyway, as I write, LF is trading at $35.71 up $1.49 on the day or 4.35%. I do not own any shares of LF nor do any members of my family.
On October 21, 2003, LF reported their third quarter results for the quarter ended September 30, 2003. I picked this up on the NYTimes on the Web which utilized PRNewswire-Firstcall via COMTEX. Net sales for the third quarter were $203.9 million up 12% from the same period last year. Net income for the quarter was $33.4 million or $.55/share up 25% from net income of $26.7 million or $.50/share last year.
Looking at Morningstar.com, we find that LF has increased revenue from $31 million in 1998, $71.9 million in 1999, $160.1 million in 2000, $314.2 million in 2001, $531.8 million in 2002 and $575.3 million in the trailing twelve months.
Free cash flow has improved from ($39) million in 2000, ($49) million in 2001, $8 million in 2002 and $17 million in the trailing twelve months.
The balance sheet, as reported on Morningstar.com, looks excellent with $115.0 million in cash--more than enough to cover both the current liabilities of $59.0 million and the small $3.4 million in long-term debt. In addition LeapFrog is reported to have an additional $192.8 million in other current assets.
Looking at "key statistics" on yahoo.com, we find that LeapFrog has a Market Cap of $2.08 billion with a trailing p/e of 37.50 and a forward p/e (2004) of 23.28. The PEG ratio isn't too bad at 1.25 but the price/sales a bit steep at 3.32. There are 57.87 million shares outstanding with only 19.50 million of them that float. A full 66.31% of shares are held by insiders. Currently there are 4.40 million shares out short...which is quite significant...as of 10/8/03. This represents 7.24 days of average trading volume for these short sellers to cover.
No dividend is paid.
This is a nice picture overall for LF...however, it appears that sales may be slowing somewhat. Also, the valuation re: price/earnings and price/sales is a bit rich for my diet. The recent price move up may represent a bit of a short squeeze which may propel the stock higher...as there are apparently a ton of shares out there that need to be rebought and returned to their rightful owners (short-covering!)
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