Earnings season has come and gone. But that doesn’t mean the opportunities have ended…
The company we’re bringing you today beat the average Wall Street analyst estimate by 36% when it reported on Feb. 11.
But somehow the stock is down 10% to date.
You see, the company has one major tailwind at its back that means there’s a high probability shares will run much higher this year and next.
We first detected this catalyst using a propriety tool created by some of our top data scientists here at Money Morning.
It uses a company’s recent earnings and fundamentals to predict where its future profits and share price are likely headed next…
It’s called the Money Morning Stock VQScore™. This system will tell you exactly when to buy, when to sell, and when to hold a stock with one simple number.
The database ranks roughly 1,500 of the world’s most profitable companies on a scale from 0 to 4.9. The higher the number, the better. And any stock you see with over a 4.0 rating is in our “Strong Buy Zone.”
Within the last 12 months, VQScore has found multiple money-doubling returns for investors – like 118% on NVDA, 167% on RH, and even 280% on SEDG.
Today, VQScore uncovered one top toy manufacturing company as a “Strong Buy” with a 4.9 rating.
And after further examination, we think this stock could deliver 50% to 100% returns in the next 12 to 24 months because there’s a $1.2 billion to $1.8 billion catalyst ahead.
Here’s why it’s one of the best stocks to buy today…
The One Catalyst Ready Propel This Toy Manufacturer Higher
The stock VQScore uncovered for us today is American toymaker Hasbro Inc. (NASDAQ: HAS).
We like that it pays a solid 3% dividend yield. But we like the company’s ability to increase its profits even more…
From fiscal 2018 to 2019 alone, Hasbro grew its earnings a whopping 136%.
That helped the stock jump 49% over the last 12 months (even with the recent 10% decline).
Mind you, this was all without a major catalyst like the one we’re unpacking for you today…
See, Hasbro just made a new deal with the Walt Disney Co. (NYSE: DIS) last Friday. And we expect it to conservatively double the company’s earnings (and possibly triple them) by 2021.
Hasbro and Disney agreed to extend their strategic merchandising agreement for Disney’s Star Wars and Marvel superhero franchises.
Here’s why that’s huge news for Hasbro:
- Under the multiyear licensing deal, Hasbro will continue to develop a wide range of toys and games based on Marvel’s collection of more than 8,000 characters.
- The merchandising agreement covers film and television properties released during their terms for the respective franchises. It also includes properties from the newly launched Disney Plus streaming service.
- As for the Star Wars universe, Hasbro will produce toys and games based on entertainment like “Star Wars: the Clone Wars” and “The Mandalorian.” This includes the breakout star of the show, Baby Yoda.
Hasbro is the only company allowed to sell officially licensed Disney Baby Yoda toys.
We think many investors are missing the opportunity on Hasbro because they’re worried about the delay between the end of “The Mandalorian: Season 1” and the June release of Baby Yoda toys.
But in fact, the delayed release has actually built up some serious demand for the products…
Less than a day after becoming available for preorder, Hasbro’s new $59.99 Baby Yoda animatronic toy completely sold out on the Disney and Amazon websites.
Disney recently confirmed the release of “The Mandalorian: Season 2” for October 2020. So we expect that to drive a second wave in sales of Baby Yoda toys just in time for the holidays later this year.
Plus, upcoming Marvel releases like “Black Widow,” “Spider-Man: Homecoming 3,” “Thor: Love and Thunder,” and “Black Panther 2” will surely lead to even more toy sales for Hasbro.
In all, we’re projecting Hasbro’s exclusive deal with Disney to increase total net profits between $1.2 billion and $1.8 billion in fiscal 2020.
That would mean doubling or tripling the $594 million it made in 2019.
Action to Take: Wall Street has NOT correctly priced the Disney catalysts into Hasbro stock yet. We expect these exclusive rights will allow Hasbro to conservatively double net income in fiscal 2020. That will lead the stock to jump at least another 50% from current levels. It could even triple earnings, which would cause the stock to surge 100% or more. With a 4.9 Money Morning Stock VQScore today, you can feel comfortable owning this stock for the intermediate term to profit off the high demand for these Disney products.
Source: Money Morning