Taking an Options Look at Hasbro

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July 19 (Bloomberg) -- Julie Hyman reports on the latest markets news on Bloomberg Television's "Lunch Money." (Source: Bloomberg)

It is time for "on the market." there was a record close yesterday.

The s&p 500 is laura today along with the other major averages.

We are more waited to the downside today.

Let's look at the earnings winners.

We have increases in chipotle, whirlpool, general electric after positive earnings reports.

There i a lot of negatives in technology.

Microsoft posted its biggest one-day loss since 2009 and we saw negative results from intuitive surgical.

Let's talk about what we are looking at next week and earnings.

Barbie got banged up this week but mattel reports its earnings next week and it is also hasbro's turn.

Joining us to discuss this is michael perlis, chief global strategist at wheat and and company.

The analyst research seems to indicate that hasbro's more reliant on toys for boys.

Analysts are looking for some weakness in the quarter.

The options markets imply a 4% move to -- related to earnings for monday morning.

I think what has happened with the stock is it has taken a little bit of weakness that you referenced with mattel.

This is not a macro issue.

This is very company and product specific.

As mentioned, barbie has sat issues.

Whether hasbro has issues with any of its products remains to be seen.

I actually like buying august calls.

Where is that optimism coming from?

Is it because it does fallen too much because of rate mattel drag down the facts?

There's a little bit of a drag down effect.

If they come in decently on monday, you will see investors swap out of mattel and hasbro.

-- into hasbro.

With august's expiry here, you have the the ability to capture that asset reallocation from one name to the other.

There is one caveat to this optimism which is that this company has had strong momentum in emerging markets.

Emerging markets in the last quarter have had some issues so that is one caveat.

Hasbro does not have to inherit this this of the problems that mattel has had with the barbie brand of late.

That is a very product-specific issue.

There is commentary that is optimistic about the second half of the year because hasbro makes toys related to marvel characters related to star wars and will get some movies coming out in the second half of the year.

Rights, the second half of the year is important for the toy industry broadly as you get into the holidays.

The motel management team clearly was trying to pump up their second half and tried to recognize their execution issues on some of their products but rebuilding.

They had a strong message of rebuilding.

It does not seem like the street is buying that.

We had a downgrade the other day.

The stock trading, we found new lows here.

I think mattel was priced not for perfection, perhaps, but price or strongly going into the corridor.

As broke reset during the june correction.

Michael purvis, thank you so much.

We will be back in 30 minutes.

"bloomberg west"starts now.


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