Time to buy Nintendo stock, this portfolio manager says

The stock may not be on your radar but the company certainly is — Mario and Luigi? Pikachu? Princess Peach? You’d have to be over 80 and/or half-comatose for the past 35 years to not know about Nintendo. At the same time, owning a piece of the gaming and merch company is less talked about. 

But it’s out there, and portfolio manager Kim Bolton says it’s worth looking into. In fact, Bolton has named Nintendo ADR (Nintendo ADR Stock Quote, Charts, News, Analysts, Financials OTC:NTDOY) as one of his Top Picks for the year ahead.

“We just added this to the portfolio today. We took a bit of money out of some of our larger holdings of Microsoft, Amazon and Google and put it over into Nintendo,” said Bolton, President of Black Swan Dexteritas, who spoke on BNN Bloomberg on Wednesday.

“They have a number of classic titles, all the way from MarioKart to Smash Brothers and so on and they have a very, very healthy pipeline. They expect to expand on their Nintendo Switch online subscription plan,” he said.

With a market cap of currently $55 billion, Nintendo trades on the Tokyo and Osaka exchanges but can be bought over-the-counter as an ADR (American Depository Receipt) here in North America. ADR’s are receipts offered by US banks who themselves hold the foreign securities, allowing North American investors the opportunity to effectively own fractions of shares or whole shares in the foreign company without the added currency exchange and regulatory issues. In the case of Nintendo ADR under the symbol NTDOY, shareholders own one-eighth of a Nintendo share with every ADR share. 

Nintendo ADR offers a small dividend of just over one per cent, and the stock has been moving downward over the past couple of years after peaking in January, 2021. Now trading in the $10-$11 range, NTDOY had been as high as $16 early last year.

But the company is certainly doing well. The advent of Nintendo Switch in 2017 propelled sales to new levels, while Pokémon and its offshoots have shown their staying power over the years. Just last month, Nintendo said sales of new Pokémon games Scarlet and Violet passed ten million units in the first three days on sale, a record for the company on game launches and a sign that bodes well for Nintendo’s holiday season revenue.

For Bolton, the strength of the company makes owning the stock a clear win. 

“It’s a leader in gaming and the stock has just sort of flown under the radar,” he said.