Wall Street Journal says Sony stock is a 'bargain'
by Andrew Yoon 
{ Mar 12th 2008 at 1:25PM }
Sony's stock has dropped 26% in the past year, for a number of reasons. Undoubtedly, the high costs of PS3 manufacturing and its sluggish performance hasn't helped Sony's corporate image.However, the Wall Street Journal is suggesting that this is actually a good thing for investors. Sony's stock has always been "undervalued" according to their analysis. However, in recent time the stock has "become even more attractive."
The video game unit's quarterly profit and increasing demand for the PS3 is making Sony a much more desirable company to invest in. Analysts have been quick to call Sony the ultimate "winner" of this generation of consoles, and the recent victory of Blu-ray in the format war is a huge help for the company. After such troubled performance, it's only a matter of time before Sony's stock goes back on the rise. Perhaps now is the time to invest.
[Via Joystiq]
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Reader Comments (Page 1 of 1)
ajiezer @ Mar 12th 2008 1:39PM
Too bad all my money is already invested in their games :D
Jerses @ Mar 12th 2008 2:15PM
me too, i already give my life to sony.
Haiddasalami @ Mar 12th 2008 2:16PM
Anyone know how much I can get some Sony stock for...
Popfrogs @ Mar 12th 2008 2:32PM
"SNE" stock is currently at ~$45 right now.
ajiezer @ Mar 12th 2008 2:18PM
@Jerses
Hahaha, true, gave my life, money and also I'm painting my apartment with blue colors so my future and present are BLU LOL
brazen @ Mar 12th 2008 2:54PM
I wouldn't buy this stock based on the performance of the PS3... considering that is but one small piece of their business
Popfrogs @ Mar 12th 2008 3:15PM
..but buying Sony based on the strength of Blu-ray, their Vaio line, the PS3, the tripled-expectations delivery from SonyEricsson last quarter, the Bravia line...isn't such a bad idea.
brazen @ Mar 12th 2008 3:22PM
Popfrogs --- very true, kind of what I was getting at. Surely Bluray and the PS3 is relevant if you are considering buying the stock, but I don't think its smart to base your decision on that... and for this reason, I don't think its relevant for PS3FB to blog about this article... They seem to get carried away with all things Sony and specifically Bluray --- and this article seems to promote this shortsighted idea that sony is dependant on the ps3 and bluray for success, and it seems to inflate the actual impact of the PS3 on Sony.
I would never buy Microsoft stock on the basis of xbox360 performance or sell it on the basis of HD-DVD's demise... For the same reason I would not buy sony because of the recent success of the PS3/Bluray
joel @ Mar 12th 2008 5:44PM
Brazen,
Unlike MS games make up a key part of the Sony portfolio. The PS division has carried Sony to profit over many years of otherwise disappointing results.
It was fairly surprising to see the movie and electronic business keep Sony profitable during the darkest hours of the PS3 launch. In previous years they have been posting losses.
The comparison between MS and Sony isn't quite right.
brazen @ Mar 12th 2008 7:31PM
joel - Thanks for your response... Indeed, the games division at Sony has helped to offset losses from other operating segments in previous years, but the fact is, this segment only makes up about a tenth of Sony. If you read their 07AR, you will see that the gaming segment constituted only 11% of Sony's yearly sales.
The gaming segment at microsoft makes up a similar % of overall sales compared to Sony. According to their 07AR you can see that it is also a little over 10%.
So, in this regard, the two companies are comparable for the purpose of my argument.
I do agree with you in a sense, because Sony relies to a greater extent on cross selling between product segments (where a satisfied customer may buy an unrelated sony product), but they both has similar bets in the gaming market as a % of each of their respective companies.
Dave Comeau @ Mar 12th 2008 6:44PM
I agree with WSJ...I bought a couple bundles of shares in the past couple of months. I don't expect much of a return until into 2009 / 2010, but I see this as a good investment NOW.
The PS3 is a solid and sexy interactive gateway into the living room, and Sony has a pretty good technology stack with their HDTV's, PS3, PSP, Blu-ray, and also media content to help push their future online store initiatives and other media companies will sign on when it's shown to be profitiable.
I think Sony is going to make lots of profit off of transactions like game related DLC as well as movies, music and other media. Think iTunes-like IPTV, etc. The PlayTV module can evolve into this too, putting it into a global context.
BTW...I don't know why it's such a big deal to people that non-game related posts like this show up on PS3 Fanboy...isn't it easier to just not read them than to post comments about how irrelevant it is?
brazen @ Mar 12th 2008 7:42PM
Dave - my problem was not that it was non-ps3 related, its just that if they are going to write this type of story they need to get their analysis right. This post is misleading b/c it seems to argue that Sony is succeeding due to the success of the PS3. Perhaps it is minor thing to gripe about, but it especially bothers me that they use this medium to push a stock recommendation. That's why I wanted to clarify that Sony's gaming business/bluray is not entirely significant when it comes to their stock price performance.
The shoddy/misleading analysis and lack of context in this posting just goes to show the lack of financial knowledge by the author. I come to PS3FB for knowledge related to the PS3, if I want knowledge about Sony as a company/stock I'll read their annual report, the WSJ, the Economist or some other reputable financial source.