Nintendo Shares Could be a Buy

Nintendo Co., Ltd (ADR) (PINK:NTDOY) has talked down the 3DS Returns buzz and the impact from Japan's earthquake.  Despite the company going to bat for itself its shares continue to plunge.  Nintendo is now trading less than 5% from its 52-week low and under $32.  Is there hope for shareholders?

EVERTHING IS FINE
That's the message from Nintendo lately yet traders continue to put pressure on the stock and down it goes.  Since late February Nintendo shares have fallen 17%.

At first it there was concern that the earthquake / tsunami in Japan would negatively impact Nintendo's HQ in Toyko.  That was put to rest on March 23rd when the company informed the public no one was harmed by the earthquake and their building suffered no damages. Nintendo's distributions centers are in America, Canada, Germany and the company was all set for their 3DS launch.  It was at this point when I speculated:
Nintendo is ready to bounce back but Wall Street isn't buying it yet.

Nintendo's cash position will continue to hurt the company until stability returns to the yen.

Should the 3DS be a success then Nintendo shares will not fall any further.

3DS UPDATE
(washingtonpost.com ) The British newspaper the Sun splashed a report across its front page on Tuesday saying that the Nintendo 3DS is being returned at record rates in the United Kingdom. There have been reports that the handheld is causing some headaches and dizziness since Nintendo launched the 3DS, but this is the first mention of widespread returns.

But Nintendo denies those claims, saying they have not heard of any above-average return rates. In a statement, Charlie Scibetta, senior director of corporate communications for Nintendo of America, said:

The number of calls and emails received by our customer support center regarding Nintendo 3DS is well below the rate experienced during past hardware launches, and there are no widespread issues. U.S. retailers are also not reporting Nintendo 3DS product return rates that are above normal. As always, people who have questions or comments about Nintendo 3DS or any Nintendo products can visit our support website at  http://support.nintendo.com or call 800-255-3700.

Nintendo announced last week that sales for the 3DS were the highest handheld sales in the company’s history. (source: http://www.washingtonpost.com/)

Bottom line: If you believe Nintendo and the management team at the company then now would be the time to buy its stock.  CrunchGear.com estimates it cost less than $100 to build the new 3DS, they retail in the U.S. for around $250 .  If Nintendo does have a hit on its hands with the 3DS it could be enough to take it shares at least 10%+ from its current level.  The trend for Nintendo shares are no doubt bearish with shares losing 6.3% in the past five days.  The stock is now well below its 50 and 200-day moving averages of $35.15 and $34.34 respectively.