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Wed, 22 Dec 2004

Smaller children don't spend much money because their hands are too tiny to grasp $100 bills, but they really can get their imaginations around toys that let them create little worlds. That's the reason I have become so interested in RC2 (RCRC:Nasdaq - commentary - research) this holiday season. It is the distributor or manufacturer of the Thomas the Tank Engine group of wooden train toys, as well as Bob the Builder and all the Ertl toy cars, and it apparently has emerged as one of the strongest performers at stores this year. RC2's share price rose from less than $1 in late 2000 to a high of $35.80 earlier this year, but shares recently have settled back to long-term support around $30. This is a seasonally weak time of year for toy stocks because they tend to run up in the spring during toy-wholesaling shows in anticipation of a good holiday, and then drift during the actual selling season. It would make sense to start accumulating weakened shares now in anticipation of the next markup period for toy stocks.
Posted 11:17

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