Toy-maker Hasbro (NASDAQ: HAS) has a dominant market position in old-fashioned toys like dolls and board games. The company owns the rights to Monopoly and G.I. Joe, among other assorted brand names you might remember from your childhood. The company also has strong ties to Disney and produces Star Wars action figures, not to mention toys for the Marvel cinematic universe. You want a Baby Yoda? Hasbro will be making it.
While the association with Disney is a huge positive for this stock going forward, there are a couple of major headwinds that investors should consider before buying. One big problem is that young people aren't having as many kids. The U.S. birth rate has been shrinking for years, and it's kids who create demand for toys -- fewer kids equals less demand.
That's not the biggest problem, however. The biggest challenge is that Hasbro is competing with the likes of Activision Blizzard, Nintendo, and Take-Two Interactive, among others. The toy industry risks being stuck in the past and missing out on the future -- and the future for children's entertainment is digital.
Source Fool.com