Nintendo Surprises Gamers and Investors

Nintendo (NTDOY.PK) has long been an underdog when it comes to gaming consoles. In this age of Playstation, PSP, XBox and PCs, the maker of Donkey Kong and Mario Bros has not been the average investor's radar. However, recently, with the introduction of Wii, Nintendo surprised all its critics.

It came out with the first ever console to get the gamer to move not just his fingers and hands, but his arms, shoulders and the entire body. It has finally showed the world the true meaning of virtual gaming.

The obvious success of the Wii came at a time when the PS3 was supposed to the be the big cheese and XBox 360 had the market cornered with over 150 titles. This underdog has surprised video gamers and investors alike with sales double that of the Playstation 3. In its earnings just released, NTDOY re-affirmed my bullish stance by announcing a 43% increase in profits, thanks to strong Wii sales and even stronger sales of DS. For 2006, sales of Nintendo DS were 5.3 million units.

Add Japan's growing economy to the mix: After a good 2005, Japan's stock market underperformed that of other countries and analysts are showing a renewed focus on Japan since the start of the new year. This bodes well for companies like Nintendo.

EBay (EBAY) announced their earnings yesterday and surprised Wall Street with their positive numbers. Their CFO Bob Swan said during the conference call that eBay benefited from the difficulty shoppers had in finding popular items like Playstation 3 and Wii.

In a post back in December I mentioned incorrectly that NTDOY does not trade in the US. What I meant to say was that it did not trade on the US stock exchanges. However, I like this stock so much that last week, despite my dislike for Pink Sheet stocks, I opened a new long position in Nintendo and I believe it will be one of my best positions of the year.

NTDOY.PK 1-yr chart: