Organic Growth Boosts Sony’s Stock



Price movement of Sony

Sony Corporation (SNE) has a market capitalization of $32.6 billion. SNE rose by 3.0% to close at $25.47 per share as of January 5, 2016. The stock’s price movements on a weekly, monthly, and year-to-date (or YTD) basis are 3.2%, 0.87%, and 3.5%, respectively.

Technically, the stock broke the support of all of its moving averages throughout 2015. Currently, SNE is trading 3.1% above its 20-day moving average, 3.6% below its 50-day moving average, and 8.6% below its 200-day moving average.

The Vanguard FTSE Pacific ETF (VPL) invests 0.56% of its holdings in Sony. The ETF tracks the FTSE Developed Asia Pacific Index, a market-cap–weighted index of securities in the developed markets of the Pacific region. The YTD price movement of VPL is -1.6% as of January 4, 2016.

The Vanguard FTSE Developed Markets ETF (VEA) invests 0.22% of its holdings in Sony.

The competitors of Sony and their market capitalizations are as follows:

  • Canon (CAJ) — $40.4 billion
  • Harman International Industries (HAR) — $6.8 billion
  • Dolby Laboratories (DLB) — $3.4 billion
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PlayStation 4’s 2015 performance

Sony’s PlayStation 4 (or PS4) computer entertainment system sold more than 5.7 million units during the 2015 holiday season. The total sales of the PS4 are more than 35.9 million units as of January 3, 2016.

PS4 software sales also rose, with more than 35 million units being sold in retail stores and through digital downloads on the PlayStation Store.

The number of users subscribed to PlayStation Plus at the end of 2015 rose by 60% as compared to the same period in the previous year.

Sony’s performance in fiscal 2Q15

Sony reported fiscal 2Q15 sales and operating revenue of $15.8 billion, a rise of 6.8% when compared to sales and operating revenue of $14.8 billion in fiscal 1Q15. Its net income and EPS (earnings per share) fell to $280.0 million and $0.22, respectively, in fiscal 2Q15, as compared to net income and EPS of $676.0 million and $0.58, respectively, in fiscal 1Q15.

Meanwhile, the company’s cash and cash equivalents and inventories rose by 64.7% and 23.4%, respectively, in fiscal 2Q15 on a quarterly basis. Its debt-to-equity ratio fell to 4.2 in fiscal 2Q15 as compared to a debt-to-equity ratio of 4.4 in fiscal 1Q15.


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