Investors were happy to play with Nintendo(OTC: NTDOY) shares on the first trading day of the week. The storied Japanese video game company's stock saw a nearly 3% lift in price on the day, following an analyst's initiation of coverage with a resounding buy recommendation. That rise was on a generally down day for the market, as evidenced by the benchmark S&P 500 index's nearly 1% slide.
Started at an unambiguous buy
The initiating party was TD Cowen prognosticator Doug Creutz, who inaugurated his Nintendo coverage with said buy recommendation and a price target of 10,600 yen ($71.25) per each of the company's Japan-listed shares.
In his research note launching coverage, Creutz dug into the video game mainstay's history as a publicly traded company. Nintendo's latest video game console should be released in the next seven to 15 months, he wrote, and the months leading up to console releases have traditionally been an ideal time to buy its shares.
"Since 1994, during periods that are within one year of a home console launch (before or after), a total window of 10 years, Nintendo shares have outperformed the market by a cumulative 524%," he pointed out.
Past performance does not guarantee, etc.
As investors, we should never buy into a stock expecting past trading patterns to repeat themselves. Yet Creutz also had solid fundamental reasons for his Nintendo buy recommendation; in his view, the company has managed to keep the quality of its games high, allowing it to consistently book high-margin sales on its wares.
Should you invest $1,000 in Nintendo right now?
Before you buy stock in Nintendo, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nintendo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $765,523!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 7, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.
