FPA Crescent Fund on Nintendo Co., Ltd.
Thesis
Nintendo remained a long position despite detracting from portfolio performance during the period. The fund points to the successful launch and adoption of the Nintendo Switch 2 and continues to view Nintendo as a strong franchise with valuable intellectual property. Management believes the company has a long runway to monetize its gaming assets even though rising memory prices may pressure hardware margins. The continued positive fundamental view indicates that the recent share weakness has not changed the fund's long-term thesis.
“We continue to view Nintendo as a strong franchise with valuable intellectual property and a long runway for monetization across gaming.”
Key risks
- Increasing memory prices could negatively affect hardware margins