Stock Alert for Majesco Entertainment Co. (COOL)
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    Stock Alert for Majesco Entertainment Co. (COOL)

    Majesco Entertainment Co. (COOL) is a provider of video games for the mass market.  Building on more than 20 years of operating history, the Company is focused on developing and publishing a wide range of casual and family oriented video games on all leading console and handheld platforms as well as online, social networks and mobile devices.  COOL’s product highlights include Zumba® Fitness, Cooking Mama™, and Alvin and the Chipmunks.

    Share Statistics (12-Mar-11)   FY

    2010

    FY

    2011

    %

    Chg

    Q4

    2010

    Q4

    2011

    %

    Chg

    Symbol COOL Revenue, $Mn 75.65 125.29 65.6% 23.38 25.14 7.5%
    Current price $2.97 Gross marg. 24.3% 36.2% 49.0% 16.2% 16.9% 4.3%
    52wk Range: $1.61-$4.53 Oper. margin 9.1% -11.7%
    Avg Vol (3m): 843,816 Net margin -1.3% 5.5% -523.1% -6.5% -15.5% 138.5%
    Market Cap. 117.86M              
    Shares Outstanding 39.68M EPS, $ -0.04 0.21 -625.0% -0.03 -0.10 233.3%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Majesco Entertainment Co. (COOL) jumped as  much as 8% to reach an intraday high of $3.04 Monday, ahead of its earnings report. Over 3.09 million shares traded hands during the session, versus the 10-day average volume of over 638K.

    PEIX have risen 16.5% in the last five days ; 13.8% in the last month; and 11.7% year-to-date.

    Following the closing bell, the video games maker posted its financial results for the the first quarter ended January 31, 2012, highlighting stronger revenue growth due to the success of its Zumba Fitness 2 product. COOL released Zumba Fitness 2 for the Wii on November 15, and has sold over one million units worldwide in its first four months.  To date, COOL’s Zumba Fitness franchise has sold over 6 million units around the world.

    COOL reported net revenues of $66.2 million for its fiscal first quarter, up 37% compared to $48.5 million reported in the same period a year ago.

    Operating income for the latest period came in at $7.6 million, compared to operating income of $8.0 million in the first quarter of 2011. Net income was $7.7 million, or $0.19 per share, compared to net income of $6.8 million, or $0.18 per share, in 2011. On a non-GAAP basis, net income for the quarter was $7.3 million, or $0.18 per share, compared to non-GAAP net income of $7.5 million, or $0.20 per share, last year.

    As of January 31, 2012, the Company had $21.8 million in cash and cash equivalents, compared with $7.9 million on January 31, 2011.

    According to Jesse Sutton, CEO of COOL, the Company is equally excited about Zumba Fitness Rush, which was just released in February, exclusive to the Kinect platform. The Company is also pleased with the performance of several other titles from this past holiday season including Cooking Mama 4: Kitchen Magic on the 3DS, and Alvin and the Chipmunks: Chipwrecked on Kinect, Wii and DS.

    In addition, the Company recently announced that Mini Putt Park, its first internally developed social game will be coming to the Facebook platform in a few weeks, and it also expects to launch as many as four new mobile titles for the iOS and Android marketplaces this year.  Sutton concluded that the Company is very excited by the development progress of its extremely innovative, motion-based game developed in partnership with the NBA, and looks forward to announcing details next month.

    Looking forward, COOL expects fiscal 2012 full year net revenue in a range of $130 to $140 million, and non-GAAP earnings per share of $0.25 to $0.35. The Company based its outlook on an estimated fully diluted share count of about 41.5 million, assuming non-cash compensation of about $0.05 to $0.07 per share for fiscal 2012.

    COOL added $0.16 to close yesterday’s session at $2.97.  In the past 52 weeks, shares of COOL have traded between a low of $1.61 and a high of $4.53. The stock is currently above its 50-day moving average of $2.55 and above its 200-day moving average of $2.70.

    Source:

    http://finance.yahoo.com/news/majesco-entertainment-company-reports-first-200500213.html

    Financial Strength (12-Mar-2012)

    Company

    Industry

    Sector

    Quick Ratio (MRQ) 1.45 3.58 1.10
    Current Ratio (MRQ) 1.87 3.87 1.34
    LT Debt to Equity (MRQ) 0.00 9.37 54.46
    Total Debt to Equity (MRQ) 0.00 12.62 92.14
    Interest Coverage (TTM) -4.07 0.10 0.36

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Mar12-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    Electronic Arts Inc. EA 16.84 5.58B 19.58 14.52 1.34 1.24
    Activision Blizzard Inc. ATVI 11.94 13.41B 12.57 11.37 2.93 2.82
    Nintendo Co. Ltd. NTDOY 17.51 17.91B n/a n/a 1.22 0.91
    Multimedia & Graphics Software Median       12.95 n/a 1.48 n/a
    Majesco Entertainment Co. COOL 2.97 117.86M 8.49 7.82 0.86 0.83

    Source: Thomson Financial

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