3SOF

What JAKK needs now is some international expansion, as the company still only sells 12% internationally. A few days ago I went to ToysrUs here in Portugal and found some JAKK products, which I believe weren't there in the past. They had those wrestling action figures for sale. I don't think they will sell very well here, because people are not very familiar with wrestling, it isn't a part of our culture.

What they should sell, instead, was their Plug it in and Play TV games. Those would sell out pretty quickly. I'm sure the company knows this fairly well, but, anyway, I'm going to write an e-mail with the suggestion.

As I read the latest earnings presentation, I get a slight detail that may mean a lot for the future of the stock price:

"We are reaffirming our previously issued 2007 guidance of at least $800 million in net sales and net income of $75.8 million, or $2.39 per diluted share."

I'll keep holding JAKK.

JAKK is trading at 11 times earnings and I believe it will positively surprise the market going forward, regardless of how the general economy does. Technically the stock almost touched its ascending trendline support, currently at $27.13.

I'll continue holding JAKK.

JAKK reacted well to the ascending trendline support. I think it is just a matter of time before it pushes up to a new all time high (the current all time high is $29.33).

Volume picked up considerably on JAKK today, I wonder why. It was the highest volume in roughly two months. The stock was down a bit on the day, closing right at short term technical support.

Whatever happens to the technical picture, I'm very confident we'll see new all time highs sooner rather than later for JAKK.

fyi

JAKK: Short Interest UP 10.6% to 3.8M in Jun 2007
Tuesday , June 26, 2007 16:34ET

According to new short interest data from NASDAQ, short interest for JAKKS Pacific Inc (NasdaqNM: JAKK) INCREASED 10.6% to 3,839,383 shares for the month ended mid-June, 2007.

SYMBOL    MAY            JUNE          CHANGE       %CHANGE  DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
JAKK    3,470,903       3,839,383        +368,480       +10.62%          11

Based on JAKK's 20-day average daily share volume of 356,400, it would require approximately 11 day(s) of buying to cover this short interest.

Thanks La-Onda, that is a relevant short position. I expect the stock to breakout to a new all time high and all those bears will have to compete to buy to cover, further moving the stock up.

JAKK closed just 1.7% shy of a new all time high, which was set on October 26, 1999 at $29.33.

The company's internal guidance for 2007 EPS is "at least $2.39", so JAKK is still trading at 12 times earnings, compared to 24.77 for the Toys & Games industry average.

I'm very confident that JAKK is about to explode on the upside, due to the fact that it is undervalued, and because shorts will need to cover all the way up as the stock enters a new high territory. Maybe next week, but I'll keep holding JAKK for the long term.

Despite my strong believe that JAKK is undervalued and set to breakout to a new all time high above $29.33, of course a lot of people see it the opposite way, and feel we're near the highs. The $29 area is a very strong resistance level, so probably it will take time to digest and surpass.

However, every time the stock goes down bulls show up to buy. This bull/bear fight will go on until one of the groups wins and the stock decisively goes in one direction. I think the bulls will win the short term fight, but even if they don't, I'll keep on holding because it is about time for me to trust my convictions and analysis and not listen to the short term waves of the market, which are meaningless for the medium term future of the stock price.

JAKK couldn't make a move towards new all time highs above $29.33, but bears also couldn't close it back below the $28.5 support level. So the stock is stuck in this very tight range.

Fundamentals are as attractive as they can be, considering the risk, which is quite low in my opinion. This company is a very diversified maker of cheap toys. There will always be demand for the company's products. Revenue in 2007 will be "at least $800 M" and EPS will be "at least $2.39".

I'm also a big fan of the company's Plug it in and Play TV games. I think they're going to be a huge hit in Europe (also in the US, I believe they're selling very well).

Another issue I love about JAKK is the stability of the net profit margin (between 9 and 10%), which is indicative of very skilled management. 

If I had to put all my money in one stock of the Main Portfolio that stock would be JAKK.

JAKK is getting ready to make the trip to unknown territory, that is, new all time high land. Possibly this week. I'll keep holding JAKK.

JAKK continues to warm up for a beautiful white marubozu with volume above average that will put it in all time high territory for every mortal to see.

Trading at 12 times very solid and consistent earnings makes JAKK one of the cheapest and most attractive $500 M market cap plus stock out there in the market.

I firmly believe the company will beat its $2.39 EPS guidance for 2007. Man, if they start selling those Plug it in & Play TV games in Europe, I'm sure revenues and profits will skyrocket. They're so cool

I should give my son some JAKK's shares in Christmas. I'm sure he wouldn't appreciate them now, but 10 years into the future, he'll love the present

JAKK closed just 0.54% shy of an all time high. But it already closed at a seven year high. I'll just let the profits run.

JAKK finally closed at a new all time high. Discussion time is over now, it's time for the bears to recognize they were wrong and buy the stock. Or else watch it rise on the sidelines.

After being losing more than 12% on JAKK I'm now winning 15% and I'll keep on holding, because the best is yet to come.

Now that JAKK is comfortably at a new all time high, I need to focus on my valuation model, to see if the estimates are reasonable or not:



Let's focus on that 17% revenue CAGR estimate. Revenues in 2006 were $765.4 M, so, to be in line with the long term estimate, they should be $895.5 M in 2007. So far the company's guidance is "at least $800 M", so it needs to beat guidance by a wide margin to stay in line.

I happen to believe this will be the case.

I'll continue holding JAKK.

JAKK was one of the few green spots of the Main Portfolio yesterday, rising 1% with volume above average of 1.265 million shares.

It seems 2nd quarter earnings will be out tomorrow:

TABLE: Unconfirmed Earnings Expected Wednesday, Jul 18

Expectations are the following:



I expect JAKK to beat estimates, like it did over the past three quarters.

I'll continue holding JAKK.

Quote from: David Randolph on July 17, 2007, 06:55:19 AM

I expect JAKK to beat estimates, like it did over the past three quarters.

I'll continue holding JAKK.

Let's see what the market respons was the day before and after earnings:
                           
     Nov 8   Nov 9   Nov 10          Feb 23  Feb 26 Feb 27        Apr 25  Apr 26  Apr 27
           06       06        06                 07         07        07*            07        07         07
Open  22,17   22,30   21,76          21,04   24,73   24,38         25,01   25,99   26,55
High   22,34   22,30   22,17      21,54   25,96   24,84      25,98   26,81   26,55
Low   21,86   21,57   21,76      20,87   24,18   24,05      24,71   24,97   24,56
close   22,30   21,70   22,09      21,53   25,24   24,16      25,56   26,60   24,95
            Nov 13 th back up               Feb 28th back up                 May 1st back up

* Complete market correction

If the past is any indication of the past one should sell on the day of earning, buy back day after and enjoy the ride up again after that...

That's what I'll do. And if my track record is any indication everybody else should indeed hold b/c it seems that when I do that the past is no indication of the past 

Amarens