Nintendo Co Ltd <7974.OS> shares are oversold, Barron's said on Sunday, and reported that strong growth for the Japanese maker of electronic game systems should resume this year.
The weekly investing magazine noted Nintendo shares have been hit since the company reduced its expectations for the fiscal year that ended last month, based on the company's more conservative outlook for Wii sales, news that Sony's <6758.T> PlayStation outsold Wii in Japan last month and amid broader concern about Japan's weak economic outlook.
Yet Barron's said some analysts believe the company beat profit expectations for the year completed, delivering $5.6 billion operating profit, and predict that earnings will rise sharply in fiscal 2010. Video-game sales, which analysts see as recession-proof, are seen rising in the second half of this year.
Barron's also said investors were ignoring Nintendo's strong balance sheet, its capacity for boosting its dividend and shares that are priced reasonably relative to the company's projected growth.
(Reporting by Joseph A. Giannone, editing by Maureen Bavdek)