MCZ - Sector: Technology---Industry: Computer Peripherals

[la-onda]

nice chart today....

[David Randolph]

This Analysis was requested a while ago in the «Analysis on Demand» thread, which is available only for 3SOF Premium Members (14-Day Free Trial available).


1. Profile

Mad Catz Interactive, Inc. (MCZ), together with its subsidiaries, engages in the design, manufacture, marketing, and distribution of accessories for video game platforms in the United States. Its products include video game controllers and accessories, such as control pads, steering wheels, joysticks, memory cards, video cables, light guns, dance pads, microphones, car adapters, and carry cases. The company also markets game enhancement software and publishes video games. Mad Catz Interactive markets its products in the United States, Canada, and Europe. The company was founded in 1989.

2. Stock Price History
2.1. Chart since IPO



I guess there's some anomaly in this chart back in 1999, since in stockcharts.com I see the company's IPO at around $3.5 in November 1999.

MCZ fell 90% from the early 2000 high of $3.5 to the April 2001 low of $0.30. Then a recovery began which took the stock to a high of $1.98 in August 2001 (a 560% advance in just 4 months). It's interesting to note that the company's fundamentals justified these wild moves, because revenue shrank from $72 M in 2000 to $55 M in 2001. Then it rebounded to $85 M in fiscal 2002 (which started in April 2001) and the company returned a $0.02 EPS for the year. The stock price moved as expectations changed.

But then the market thought that a $1.98 stock price was too high for just $0.02 in EPS (the P/E ratio was 99) and the stock fell back down to a low of $0.43 in early 2003 (here the P/E was a more normal 21.5). Then another recovery phase and another dip back down to values below $0.5.

The 2nd big advance phase began in mid 2004 and lasted until early 2005. This was a 325% rise. Again, it was fully justified by the fundamental landscape, because EPS rose from $0.02 in 2004 to $0.08 in fiscal 2005 (which ended in March 2005). However, because the company couldn't sustain profits and indeed posted a ($0.12) loss per share in fiscal 2006, the stock fell 84% to $0.30, its all time low. This was in August 2006.

Now, one year later, MCZ closed at $0.99. The company reported EPS of $0.07 in fiscal 2007, so the trailing P/E is 14, which is moderately attractive.

2.2. Short term chart



In mid May, 2007, MCZ started a meaningful 100% plus rally. There weren't any news to justify the change, I guess it was just that the stock was too cheap. Earnings were out on August 14 and the market wasn't particularly interested, even though they were positive from a gross margin basis, as the company achieved a record 32% gross margin. Sales were down 19.6%, as expected.

I view the results as positive because MCZ's problem isn't the level of sales, but its low margins. The company is now a $55 M market cap company.

Technically, as we look at the chart since the IPO, it sure looks like another cyclical downturn is happening that will only stop, as usual, at around $0.30. However the short term chart shows support at the 200 days SMA.

3. Fundamental Analysis



As you probably know my valuation model has 4 variables, which are the white lines, the yellow lines are known facts and the dark yellow lines are calculated automatically by Excel.

1) Dilution Factor

Historically, and for the past three years, there wasn't any share count increase in MCZ, so I considered just 1% as the dilution factor (1.01 on the model).

2) Revenue CAGR

Since revenue in the fiscal 1st quarter of 2008 fell 19.6% from the year ago levels, I think revenues will be about 15 - 20% lower three years from now than what they were in fiscal 2007. This means fiscal 2010 revenue of about $85 M and 0.95 as revenue CAGR in the valuation model.

3) Net Profit Margin

Net profit margin was 3.7% in fiscal 2007 and I expect it to expand to about 7% over the long term. I don't think MCZ has a business model that will bring it more than 10% net profit margin, there's intense competition in its space and it has no pricing power. Except perhaps for the its new product, the Hybrid Earphones, but they will be selling for such a high price ($99.99), I don't know if there will be strong demand for them. It's an open question.

4) EPS multiple estimate

Here I put the Toys & Games industry average P/E, which is 17.9.

5. Conclusion

The valuation model results tell me MCZ is undervalued, but not extremely attractive, with an expected share price CAGR of 25%. The optimal selling price (the price at which the share price CAGR falls below 16%) given by my valuation model is $1.25, that is, about 26% higher than the current share price, which is attractive, but not enough to buy for a concentrated portfolio like the Main.

Overall I think this stock moves wildly with changes in EPS, but I don't see EPS growing much more than the $0.07 the company reported in 2007, unless there's a fundamental change of some kind, like truly innovative products. The hybrid earphone is a good promise, but I would wait to see if it sells or not. As for the rest of the product portfolio ... I don't find it particularly interesting.

My current opinion on MCZ is moderately positive. Good luck if you own it and please let me know if there's new, relevant, information.


This Analysis was requested a while ago in the «Analysis on Demand» thread, which is available only for 3SOF Premium Members (14-Day Free Trial available).

[la-onda]

on fire yesterday 

MCZ: Jumps +15.38%; Vol +159%; Last 90 Min of Trading
Friday , September 21, 2007 16:21ET

During the last 90 minutes of today's session, shares of Mad Catz Interactive, Incorporated (AMEX: MCZ) demonstrated a strong UPWARD close relative to its 13:30 ET statistics. "Strong Closers" are determined by proprietary Knobias calculations performed during the last segment of each trading day.

sym: MCZ       @13:30 ET        @CLOSE      % CHANGE
----------   -----------   -----------  ------------
PRICE              $1.04         $1.20       +15.38%
VOLUME           732,000     1,894,500      +158.81%
#TRADES              439         1,285      +192.71%
DAY-HI             $1.04         $1.21       LATE-HI
DAY-LO             $0.98         $0.98           N/A

[setravis]

(MCZ)
Mad Catz Could See Increased
Sales on Halo 3 Debut
As many know, gamers have fairly deep pockets and are very
willing to dig into those pockets for some of the most popular
titles. The crowds that amassed for the newest Xbox a couple
of years ago and the PlayStation 3 last year display the fact that
when there is something new in the gaming world, the fanatics
will go to any length to acquire the product.
Well, the latest product to hit the shelves will be Halo 3. Its predecessors have been the staple in
the Xbox's line of games. When Halo 2 was released in the late fall 2004, it managed $125 million
in sales within a day of its arrival. Many analysts were predicting some $200 million in sales the
first week for Halo 3.
The release could have a trickle down effect in the small cap space. Mad Catz Interactive, Inc.
(MCZ) could receive attention from traders and possible be lumped in as a 'Halo' play. The Company
designs and markets a full range of accessories for video game systems and publishes
video game software, including the GameShark brand of video game enhancements. Mad Catz
has distribution through most leading retailers offering interactive entertainment products.
In May, the Company announced that it had entered into an agreement with Microsoft to produce
faceplates featuring characters from the Halo 3 video game. Currently, the Company has those
faceplates for sale on its website in an accessories bundle which includes an additional controller
and earpiece for $69.97 or singular for only $29.97.
The faceplates are somewhat similar to the faceplates you'll find on cellphones which can be
snapped into place with the user's favorite team, color, or any other picture imprinted onto the
phone cover. These faceplates for the Xbox also come with side stickers to fully cover the Xbox
with the user's desired theme.
The Company also recently expanded its license agreement with the NFL whereby it produces
customized NFL team controllers and other accessories for the PlayStation(R)2, PlayStation 3,
Xbox, Xbox 360, PSP, Nintendo DS Lite, and Nintendo Wii gaming consoles. The new agreement
expands the original 2004 license agreement between Mad Catz and the NFL to allow the
Company to distribute licensed products in Canada, Mexico and the United Kingdom, in addition
to the U.S.
Also of note is Mad Catz latest acquisition. On September 7th, the Company reported that it had
acquired assets and assumed certain liabilities of Joytech from Take-Two Interactive Software,
Inc. (TTWO) for approximately $3.7 million.
Joytech had been a wholly owned subsidiary of TTWO and was one of the largest manufacturers
and distributors of third-party video game accessories. All Joytech products are designed and
built in-house, providing gamers with high-quality products for all the gaming consoles, as well
as PCs, at competitive prices. By acquiring the Company, Mad Catz diversified its geographical
locations since Joytech has its headquarters in Windsor England and could attempt to capitalize
from its recent license expansion with the NFL in the United Kingdom.
In any event with the Halo 3 debut, the Company could see increased attention as a sympathy
type play, though the faceplates won't be a very large part of their overall sales. The Company
has made strides becoming more geographically diverse and has cleaned up its balance sheet in
past quarters, and with that in mind, investors would be wise to watch.

[kenmann]

MCZ is looking good today.  Volume and price are increasing.

[la-onda]

Mad Catz Sets Date to Report Fiscal 2008 Second Quarter Results, Host Conference Call and Webcast
Friday , November 02, 2007 18:59ET

Mad Catz Interactive, a third party interactive entertainment accessory provider, announced that it will release its fiscal 2008 second quarter results after the market closes on Tuesday, November 13th, and will host a conference call and webcast that same day at 5 p.m. ET.

Conference Call: Tuesday, November 13th, at 5 p.m. ET Dial-in Number: 800/205-6183 (U.S. & Canada), 415/908-6241 (International) Webcast: www.madcatz.com, select "Investors" Web Replay: 30 days Call Replay Until: Tuesday, November 20, at 7 p.m. ET Replay Number: 800/633-8284 or 402/977-9140 (International) Access Code: 21354223

Questions and answers will be taken only from participants on the conference call, the company noted in a release.

Please check attached IR presentation:

[David Randolph]

The following analysis was written on September 10th, 2007:

1. Profile

Mad Catz Interactive, Inc. (MCZ), together with its subsidiaries, engages in the design, manufacture, marketing, and distribution of accessories for video game platforms in the United States. Its products include video game controllers and accessories, such as control pads, steering wheels, joysticks, memory cards, video cables, light guns, dance pads, microphones, car adapters, and carry cases. The company also markets game enhancement software and publishes video games. Mad Catz Interactive markets its products in the United States, Canada, and Europe. The company was founded in 1989.

2. Stock Price History
2.1. Chart since IPO



I guess there's some anomaly in this chart back in 1999, since in stockcharts.com I see the company's IPO at around $3.5 in November 1999.

MCZ fell 90% from the early 2000 high of $3.5 to the April 2001 low of $0.30. Then a recovery began which took the stock to a high of $1.98 in August 2001 (a 560% advance in just 4 months). It's interesting to note that the company's fundamentals justified these wild moves, because revenue shrank from $72 M in 2000 to $55 M in 2001. Then it rebounded to $85 M in fiscal 2002 (which started in April 2001) and the company returned a $0.02 EPS for the year. The stock price moved as expectations changed.

But then the market thought that a $1.98 stock price was too high for just $0.02 in EPS (the P/E ratio was 99) and the stock fell back down to a low of $0.43 in early 2003 (here the P/E was a more normal 21.5). Then another recovery phase and another dip back down to values below $0.5.

The 2nd big advance phase began in mid 2004 and lasted until early 2005. This was a 325% rise. Again, it was fully justified by the fundamental landscape, because EPS rose from $0.02 in 2004 to $0.08 in fiscal 2005 (which ended in March 2005). However, because the company couldn't sustain profits and indeed posted a ($0.12) loss per share in fiscal 2006, the stock fell 84% to $0.30, its all time low. This was in August 2006.

Now, one year later, MCZ closed at $0.99. The company reported EPS of $0.07 in fiscal 2007, so the trailing P/E is 14, which is moderately attractive.

2.2. Short term chart



In mid May, 2007, MCZ started a meaningful 100% plus rally. There weren't any news to justify the change, I guess it was just that the stock was too cheap. Earnings were out on August 14 and the market wasn't particularly interested, even though they were positive from a gross margin basis, as the company achieved a record 32% gross margin. Sales were down 19.6%, as expected.

I view the results as positive because MCZ's problem isn't the level of sales, but its low margins. The company is now a $55 M market cap company.

Technically, as we look at the chart since the IPO, it sure looks like another cyclical downturn is happening that will only stop, as usual, at around $0.30. However the short term chart shows support at the 200 days SMA.

3. Fundamental Analysis



As you probably know my valuation model has 4 variables, which are the white lines, the yellow lines are known facts and the dark yellow lines are calculated automatically by Excel.

1) Dilution Factor

Historically, and for the past three years, there wasn't any share count increase in MCZ, so I considered just 1% as the dilution factor (1.01 on the model).

2) Revenue CAGR

Since revenue in the fiscal 1st quarter of 2008 fell 19.6% from the year ago levels, I think revenues will be about 15 - 20% lower three years from now than what they were in fiscal 2007. This means fiscal 2010 revenue of about $85 M and 0.95 as revenue CAGR in the valuation model.

3) Net Profit Margin

Net profit margin was 3.7% in fiscal 2007 and I expect it to expand to about 7% over the long term. I don't think MCZ has a business model that will bring it more than 10% net profit margin, there's intense competition in its space and it has no pricing power. Except perhaps for the its new product, the Hybrid Earphones, but they will be selling for such a high price ($99.99), I don't know if there will be strong demand for them. It's an open question.

4) EPS multiple estimate

Here I put the Toys & Games industry average P/E, which is 17.9.

5. Conclusion

The valuation model results tell me MCZ is undervalued, but not extremely attractive, with an expected share price CAGR of 25%. The optimal selling price (the price at which the share price CAGR falls below 16%) given by my valuation model is $1.25, that is, about 26% higher than the current share price, which is attractive, but not enough to buy for a concentrated portfolio like the Main.

Overall I think this stock moves wildly with changes in EPS, but I don't see EPS growing much more than the $0.07 the company reported in 2007, unless there's a fundamental change of some kind, like truly innovative products. The hybrid earphone is a good promise, but I would wait to see if it sells or not. As for the rest of the product portfolio ... I don't find it particularly interesting.

My current opinion on MCZ is moderately positive. Good luck if you own it and please let me know if there's new, relevant, information.

Tomorrow I'll write about BMRN, requested by Capricho.

[la-onda]

MCZ: MDB Capital Ups to Buy from Neutral; Sets Tgt @ $2; Analyst Notes
Thursday , November 29, 2007 11:26ET
Issuer: Mad Catz Interactive, Incorporated (AMEX: MCZ)
Analyst Firm:  MDB Capital Group LLC
Ratings Action: UPGRADE
Current Rating: Buy (from Neutral)
Target Price: $2.00
Analyst Comments: The firm notes that video game industry fundamentals continue to show increasing strength; PS3 hardware sales have increased 298% since November 2 when the 40GB $399 PS3 version was introduced in North America and the price of 80GB PS3 was reduced to $499 (from $599). They also view the recent acquisition of Saitek, a UK-based, leading maker of PC game controllers and accessories very positively, as it reflects MCZ's commitment to growth and expansion beyond its traditional video game console controllers and accessories products. The acquisition is expected to be accretive in FY08 and beyond. The Saitek acquisition significantly increases the Company's size and scalability and expands its product portfolio and geographic reach. The firm continues to believe that MCZ will introduce a Wii controller in calendar 2008, enabling the Company to capitalize on the strength of Wii sales.

[David Randolph]

The valuation model results tell me MCZ is undervalued, but not extremely attractive, with an expected share price CAGR of 25%. The optimal selling price (the price at which the share price CAGR falls below 16%) given by my valuation model is $1.25, that is, about 26% higher than the current share price, which is attractive, but not enough to buy for a concentrated portfolio like the Main.

The valuation model got it right on this one. MCZ was cut in half since November. I continue to find MCZ's products not very inspiring. How are those earphones selling? They were very expensive, if I recall correctly, $100 a piece.

[la-onda]

update:
Mad Catz Inks Multi-Year License Pact with Coffin Case Company
Monday , April 21, 2008 22:39ET

NEW YORK, Apr 21, 2008 (ASCRIBE NEWS via COMTEX) -- Mad Catz Interactive, a third-party interactive entertainment accessory provider, announced that it has entered into a multi-year licensing agreement with Coffin Case Company.

Pursuant to the agreement, Mad Catz has secured the rights to manufacture, market, and sell the official Coffin Case branded carrying cases for guitar controllers, drums and videogame accessories cases, as well as guitar straps, and other accessories, all for use with Rock Band and Guitar Hero.

"Owner and founder Jonny Edwards has built Coffin Case into one of the most original and stylish makers of cases for musical instruments in the business. This agreement allows Mad Catz to provide gamers the opportunity to transport their music game accessories with the same cool looks and protection for their gear as some of the biggest rock artists have for their instruments," said Darren Richardson, President and Chief Executive Officer of Mad Catz. "We believe the Coffin Case license is an exciting complement to the range of premium instruments we are developing for Rock Band."

[sir_joke]

look at original chart:  MCZ now back at the low end of the trough. ($.60)

but with new products and license renewals

http://biz.yahoo.com/bw/080724/20080724005682.html?.v=1

http://biz.yahoo.com/bw/080709/20080709005154.html?.v=1

Thhis should be back on everyone's long term radar to hit $1.50 on the upward trend of cycle into December.

cheers,
SJ

[setravis]

Pre-Market Mover...

Mad Catz Interactive Inc Common(AMEX: MCZ )
Pre-Market Real-Time: 2.11  0.32 (17.88%) 8:49AM EST

Volume @ 265,000

[hectorgr]

SINCE THIS PR mcz has been on fire and believe will continue adding new agreements

Press Release Source: Mad Catz Interactive, Inc. On Wednesday February 2, 2011, 8:29 am EST

SAN DIEGO--(BUSINESS WIRE)-- Mad Catz® Interactive, Inc. ("Mad Catz") (AMEX/TSX: MCZ), a leading third-party interactive entertainment accessory provider, announced today that it has entered into an agreement with Microsoft® Corporation ("Microsoft") to produce a range of licensed, co-branded audio headphones under Mad Catz's Tritton brand and Microsoft's Xbox 360 brand. Under the agreement, Mad Catz has the worldwide rights to manufacture, market and sell licensed, co-branded wired stereo headphones and exclusive rights to produce licensed, co-branded wireless stereo and Dolby 5.1 headphones for the Xbox 360 videogame and entertainment system.



Through this agreement, Mad Catz and Microsoft will work closely together to jointly design and brand wired and wireless headphones, resulting in a range of headphones that will bear the Tritton and Xbox logos on both the packaging and the headphones. This will also mark the first time that wireless, licensed and co-branded headphones will be available for Xbox 360.



Commenting on the agreement, Darren Richardson, Mad Catz's President and Chief Executive Officer, stated, "We are delighted to be working so closely with Microsoft to design and brand a range of high performance headphones. The headphone category is the fastest growing category in the video game space - and this agreement assists Mad Catz's Tritton brand in furthering its leadership to provide high-quality, innovative headphones that allow gamers and audio enthusiasts alike to enjoy a superior gaming and listening experience."



Zulfi Alam Microsoft Senior Director, Xbox 360 Accessories, added, "We are pleased to be working in close collaboration with Mad Catz to design and brand products that we believe will deliver a high quality audio experience to Xbox 360 fans. Whether playing games or enjoying music, movies or sports available on the Xbox 360, we are confident that gamers everywhere will react enthusiastically to this new range of wired and wireless headphones."



Mad Catz expects that the range of licensed, co-branded headphones will be available for the 2011 holiday shopping season.



Microsoft, Xbox, Xbox 360, Xbox LIVE, the Xbox logos, and the Xbox LIVE logo are either registered trademarks or trademarks of Microsoft Corporation in the U.S. and/or other countries.

[hectorgr]

Press Release Source: Mad Catz Interactive, Inc. On Tuesday March 1, 2011, 8:29 am EST

SAN DIEGO--(BUSINESS WIRE)-- Mad Catz® Interactive, Inc. ("Mad Catz" or "the Company") (AMEX/TSX: MCZ), a leading third-party interactive entertainment accessory provider, and Electronic Arts Inc. (NASDAQ:ERTS - News), a leading global interactive entertainment software company, announced today an agreement to produce branded PC and console videogame accessories based on 'The Sims™' franchise. The agreement grants Mad Catz non-exclusive rights to produce and market a wide range of videogame accessories for PC, Microsoft® Xbox 360® video game and entertainment system, Sony® PlayStation® 3 computer entertainment system, Wii™, Nintendo DS™ and Nintendo 3DS™ systems.



Commenting on the agreement, Darren Richardson, President and Chief Executive Officer of Mad Catz, "We are excited to work with EA and one of the most popular gaming franchises of all time. The Sims is a new and exciting opportunity for Mad Catz to reach a wider audience that includes both casual and enthusiast gamers. Our agreement with EA is part of our long-term strategy of working with the premium gaming brands and deliver innovative consumer focused accessories."



"We are delighted to be working with Mad Catz to further broaden the appeal of The Sims franchise through the introduction of specialty PC and console accessories," said Patrick O'Brien, Vice President of Electronic Arts. "Mad Catz has a long history of working with game publishers to deliver unique products, and we believe that together we can introduce a range of accessories that appeal to players of The Sims series."

[hectorgr]

About The Sims



The Sims™ franchise, the groundbreaking game series that allows players to create and live a virtual, simulated life on a computer, celebrates its ten year anniversary in 2010 with an impressive more than 125 million units sold since its launch in February 2000. Now translated into 22 different languages and available in 60 different countries, The Sims series has quickly become a universal gaming and cultural phenomenon. Since its June 2009 launch, The Sims 3 has sold more than 10 million copies worldwide to date and was the #1 best-selling PC title for 2009 in North America and Europe. Fan intensity is evidenced through nearly 250 million downloads of player created content including: The Sims characters, houses, stories and more. The Sims 3 community site, www.thesims3.com, welcomes up to seven million unique visitors monthly, handles more than 240 content downloads every minute and more than 3.5 million uploads have been made to date, including 11 movies each hour. The Sims 3 YouTube Channel is within the top 10 most viewed sponsored channels of all time with more than 45 million video views. Visit The Sims 3 official website to see what the players are creating at www.TheSims3.com or the official YouTube Channel for The Sims at http://www.youtube.com/user/TheSims. The Sims 3 is currently available for PC, Mac, iPhone®, iPod touch® and mobile devices. The Sims 3 is also available on the PlayStation®3 computer entertainment system, Xbox 360® videogame and entertainment system, Nintendo DS™, and Wii™ and in March 2011 on the Nintendo 3DS.



Follow The Sims social media: 
Facebook® Page:     http://www.facebook.com/TheSims3 
Twitter® Page:   http://twitter.com/TheSims3 
YouTube® Channel:   http://www.youtube.com/TheSims 



About Electronic Arts



Electronic Arts Inc. (EA), headquartered in Redwood City, California, is a leading global interactive entertainment software company. Founded in 1982, the Company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, wireless devices and the Internet. Electronic Arts markets its products under four brand names: EA SPORTS™, EA™, EA Mobile™ and POGO™. In fiscal 2010, EA posted GAAP net revenue of $3.7 billion and had 27 titles that sold more than one million units. EA's homepage and online game site is www.ea.com. More information about EA's products and full text of press releases can be found on the Internet at http://info.ea.com.



EA, EA SPORTS, EA Mobile, POGO and The Sims are trademarks of Electronic Arts Inc. "PlayStation" is a registered trademark of Sony Computer Entertainment Inc. Microsoft, Xbox and Xbox 360 are trademarks of the Microsoft group of companies. Wii, Nintendo DS and Nintendo 3DS are trademarks of Nintendo. iPhone and iPod touch are trademarks of Apple inc., registered in the U.S. and other countries. All other trademarks are the property of their respective owners.