LeapFrog (LF)

[rayank]

LF - http://seekingalpha.com/article/1686522-low-priced-stocks-worth-buying-round-6?source=yahoo

Leapfrog Enterprises, Inc. (LF) designs, develops, and markets technology-based learning products and related proprietary content for children. Its products focus on phonics, reading, math, spelling, science, geography, history and music. LF was founded in 1995 and is headquartered in Emeryville, California.

Financial Performance
Profit Margin 14.10%
Return on Assets 25.37%
Return on Equity 33.17%
Revenue 603.72M
Revenue per share $1.22
Quarterly Revenue Growth 16.10%

LF has steadily increased its revenue and profit since the start of 2010.


The company is on pace to see increases in both profit and revenue this year as well as both Q1 and Q2 results were ahead of the same period last year.

Current Valuation and Recent Trading Activity

LF has a current price-to-earnings value of 7.09x and a price-to-book value of 2.04x with earnings per share of $1.38.

LF closed Tuesday at $9.78, $2.17 shy of its 52-week high and $2.78 higher than its 52-week low. It is trading below its 200-day moving average of $9.51 and right at its 50-day moving average of $10.53.

Earnings

For Q2, LF reported a net loss of $0.05 per share. This was a 58% improvement from the same period last year.

Just as with its revenue, LF's net income has been on the increase for the past several years.

Company Outlook

LF seems to be on the right path. Since struggling back in 08 and 09, the company has been able to continue its uphill climb of increased revenues and earnings. Through its recent new product offerings and partnerships, LF should be able to continue seeing increases on both fronts.

LF's stock price has decreased substantially over the past month, presenting IMO a perfect buying opportunity.


I believe that LF is currently undervalued and consider it a buy at its current price. With LF's recent string of new products and improvements to existing profits, I think it's only a matter of time before LF gets closer to $20.

Conclusion

In my opinion, the three companies reviewed above (ACCO, STB, and LF) are all solid buys at their current prices. I feel that the upside potential of each of these stocks far outweighs the downside risk associated with them. Each of these companies has made strategic decisions and actions to help achieve sustained growth and prosperity in the future.

I think ACCO and LF are priced at a nice buying opportunity right now. STB is priced higher (based on earnings) but I feel that its relatively safe and high yield dividend make the valuation understandable. I think that ACCO and LF will see substantial price appreciation in the next few years. I don't see the same for STB, so I recommend it as a buy only for income investors interested mainly in STB's dividend. As always, I recommend individual investors perform their own research before making any investment decisions.