Focused on the one industry that has been around for millions of years, baby toy makers Genius Brands International (GNUS) just reported record revenues. This is a classic case where the PPS and the Financials do not match up as GNUS stock has been beat down to 0.14 by some terrible pumpers. The company reported a 96% increase in Q2, 2012 to $1,641,798 compared to Q2 of 2011 and is trading roughly 6 to 8 cents below where we value the penny stock.
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GNUS Stock Chart
20 Day Percent Change: -34.88%
20 Day Moving Average: 0.1749
20 Day Average Volume: 98,668
Looking at the raw data, the Company reported, for the six months ended June 30, 2012, an increase in revenues of 25% to $2,672,745 from $2,142,912 in the same period of 2011 which allowed for a narrowing of the Q2 2012 net loss by 24% to $(583,247) compared to $(765,351) in Q2 of 2011. Hello people – that’s a considerable amount of growth for long investors to look at.
Genius Brand has two important factors to consider before discussing the PPS: Nokia and JAKKS.
Nokia is set to launch the first two mobile apps of Genius out of an extensive series. Their early learning and kindergarten readiness apps are also scheduled to launch in Q3 with more to follow in Q4. Yes, Nkia sucks, but the Company will book higher margins in revenue from these apps compared to their store-sold products. Regarding those, available in select locations, the Company has a new toy licensing agreement with JAKKS Pacific’s Tollytots® division which is currently launching a Baby Genius® branded toy line.
Getting to the PPS now of GNUS stock: Even the most recent Share Purchase Agreement with Hillair Capital Investments L.P. allows for the financing group to purchase up to 5 million shares of GNUS stock at a price of 0.21, 7 cents, or 50%, above where the stock trades now. With the extensive number of deals they made prior to this, no one has the ability to buy shares for less than 0.19 with the majority being in the 0.20 and above range.
Click here to view the Q2 10-Q for GNUS.
About GNUS Stock
Genius Brands International, Inc. is the developer and marketer of entertainment products including the award winning Baby Genius® line of music and education-based products and characters. The Company is developing and marketing a growing line of Genius branded products that entertain and educate the whole family.
Baby Genius® awards include: Mom’s Choice Award, The National Parenting Center Seal of Approval, The Toy Insider Best Toddler Toys, Dr. Toy 100 Best Children’s Products, NAPPA Honors Award, iParenting Excellent Product Award, Creative Child Preferred Choice Award, Latino DVD Awards, iParenting Media Award, Film Advisory Board Award of Excellence, Kids First! Quality Children’s Media Endorsement, Parents Magazine 2002 “Video of the Year,” and Best “Under 3” QSR Program 2004/2005 from Restaurant Magazine. Baby Genius® products are available at most major retailers and have international exposure in over 40 countries.
Bottom Line: This is a long penny stock for someone with time and patience. GNUS stock price has been beaten up by probably the worst pumper group out there and is a steal at its current price. Volume has dropped, the PPS share has dropped and revenues and guidance have jumped which make GNUS a bargain at 0.14.
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