3SOF

People will never stop buying toys for their kids, and JAKK is an exciting toy maker.

However, the company is heavily dependent on WWE action figures and there's some litigation with WWE in courts. Perhaps that's the explanation to why it trades at just 10 times earnings.

But, just Hanna Montana and Cheetah girls dolls may eclipse WWE action figures in the second half. We'll just have to see about that, but I'm confident JAKK will close 2007 comfortably above $30.

JAKK finally showed some signs of life, after the awful sell off it had due to weaker than expected second quarter earnings. I maintain that the second quarter is almost meaningless for the full year results of this company and I expect JAKK to meet or exceed its EPS guidance of $2.39 for 2007.

Nothing new for JAKK yesterday, the stock is trading at 10 times earnings and it shouldn't. I enjoy many of the company's products, like for example, the Plug it in & Play TV games. I wish they start selling in Europe too.

I'll keep holding JAKK.

JAKK has been behaving terribly since 2nd quarter earnings came out, but I maintain that the quarter isn't all that relevant for the full year EPS number. I also believe JAKK's business will resist a potential economic recession in the US better than most businesses, because if there's one thing parents don't save is on cheap toys for their children.

The stock almost closed a gap that was opened at $21.54, but then it claw back up and closed down just 0.22%, on volume above average. I expect the stock to at least not fall much more from the current price, and to move higher when more earnings are released.

I'll hold JAKK. 

JAKK continues to head lower, on no new fundamental information. The market thinks 2007 will be like 2006, when the company had lower than expected revenues and EPS, and certainly the 2nd quarter numbers made such view more valid.

But I still think the second quarter isn't meaningful for the full year. The worst case scenario is priced in now (perhaps technically the stock will still close the gap at $21.45 before pushing higher again), so if the company posts just "in-line" numbers it will surely move back above $30.

I think this is going to be the case and I'll hold JAKK.

JAKK has been doing terribly and it has been extremely difficult to remain focused on the long term these days. I could have sold because of the "weaker than expected" quarter at $27 or so, but instead I wanted to look beyond the short term and got killed by the market.

That damn gap was closed, but I wonder if we won't go down to close another one that is opened at $18.39 now

I wasn't expecting buying a toy maker trading at 10 times earnings and then see its shares fall about 40% in a couple of weeks ... but I guess that if the company just meets expectations it will also gap up strongly and recover the lost ground. JAKK has been in a range between $10 and $30 for almost 10 years now, and during that time revenues grew 19 fold and EPS grew 7 fold, it doesn't make any sense.

I'll hold JAKK for the long term.

David,
don't get discouraged on this one. its true I don't own it right now but I am definately going to be selling my CL for it and getting back in JAKK.
according to the Dow Theory Quadrix by ticker this is how JAKK scores.

JAKK
overall score         92 (they only recomend stocks with a score over 80)
momemtum         74
value                    95
quality                   72
financial strength   79
earnings estimate  21
performance         74
volume metrics     55

Quote from: pinoleropuro on August 09, 2007, 07:04:18 AM
David,
don't get discouraged on this one. its true I don't own it right now but I am definately going to be selling my CL for it and getting back in JAKK.
according to the Dow Theory Quadrix by ticker this is how JAKK scores.

JAKK
overall score         92 (they only recomend stocks with a score over 80)
momemtum         74
value                    95
quality                   72
financial strength   79
earnings estimate  21
performance         74
volume metrics     55

Thanks for your view on JAKK pinoleropuro. I think JAKK is falling mostly for technical reasons and the stock already had its own bear market, and it is trading at just 8 times earnings now. I like the business on a long term perspective and I'll keep holding JAKK for the long term.

The 10-Q form filed yesterday shows a clean business which is growing just 5% a year, but I think the slow growth is what's priced in now. And business will probably accelerate in the second half.

JAKK went down ferociously to close the gap at $18.39, and rebounded with a vengeance to close at $21.39, with volume above average of 1.6 million shares.

It seems like JAKK doesn't like to leave gaps open ... now, after the latest non-sense move (I know BigSully doesn't agree, but I disagree with him), JAKK should immediately recover and close another gap, at $29.50.

I say the decline phase marked with 1 on the first chart below was a non-sense because it was based on a 8 cents earnings miss, when the full year number is something between $2.30 and $2.50 (the company's guidance is $2.39).

If we take out these 8 cents to the $2.39 guidance, we get $2.31, that is, 3.3% less. And, because of this slight miss, the stock price fell 39% Ridiculous if you ask me. Especially if we think that the 1st half is the weakest from a seasonal standpoint and that most of the company's investments for this season will only hit stores in Q3, like Hanna Montana and the Cheetah Girls, for example.

The company may very well meet or beat its 2007 guidance of $800 M in revenue and $2.39 EPS, since management said it is very comfortable with its full year guidance.

I'll keep holding JAKK for the long term.

Quote from: David Randolph on August 12, 2007, 04:44:25 PM
JAKK went down ferociously to close the gap at $18.39, and rebounded with a vengeance to close at $21.39, with volume above average of 1.6 million shares.

It seems like JAKK doesn't like to leave gaps open ... now, after the latest non-sense move (I know BigSully doesn't agree, but I disagree with him), JAKK should immediately recover and close another gap, at $29.50.

I say the decline phase marked with 1 on the first chart below was a non-sense because it was based on a 8 cents earnings miss, when the full year number is something between $2.30 and $2.50 (the company's guidance is $2.39).

If we take out these 8 cents to the $2.39 guidance, we get $2.31, that is, 3.3% less. And, because of this slight miss, the stock price fell 39% Ridiculous if you ask me. Especially if we think that the 1st half is the weakest from a seasonal standpoint and that most of the company's investments for this season will only hit stores in Q3, like Hanna Montana and the Cheetah Girls, for example.

The company may very well meet or beat its 2007 guidance of $800 M in revenue and $2.39 EPS, since management said it is very comfortable with its full year guidance.

I'll keep holding JAKK for the long term.

David, I don't necessarily disagree with you that JAKK might be a good value where it's at now. I chose not to buy for reasons previously given. When the ER came out, It seemed an absolute no-brainer to me to immediately short it as the current market is very unforgiving on those that miss, or even those that don't beat by enough.

It did  look like capitulation and if I had been paying attention to JAKK Friday, I should have covered immediately on the gap fill, my mistake. I still have plenty of room on it though and will probably buy to cover on a bullish close above 21.54 or so, or if it drops back to around 19. I think you overly optimistic though to think it will immediately recover and close the gap at 29.50.

Good Luck with it and may we both win money on it, I'm not in a contest with you on it. I think JAKK and TZOO was probably the only of your picks (that I can remember) where I was very outspoken negatively. Probably you will be right on JAKK at some point down the road???

Hannah Montana(TM) and The Cheetah(TM) Girls Dolls Kick Off a Rockin' Holiday Season
Monday August 13, 6:00 am ET 
JAKKS Pacific(R) Launches New Product Line Inspired by Disney Channel Tween Sensations

MALIBU, Calif., Aug. 13 /PRNewswire-FirstCall/-- Two of the hottest tween properties have made their way to the toy aisle, much to the delight of excited tween girls everywhere! JAKKS Pacific, Inc. (Nasdaq: JAKK - News) and Disney Consumer Products (NYSE: DIS - News) are introducing new role play lines based on the two hit Disney Channel properties, Hannah Montana and The Cheetah Girls. Highly-detailed fashion dolls and stylish singing dolls from JAKKS' Play Along® division are the first items expected to hit retail shelves nationwide, with a full line of products following this fall, including detailed playsets, stylish role-play and dress-up items from JAKKS' CDI(TM) division, and deluxe interactive video games from JAKKS' Plug It In and Play TV Games(TM) line.

"After months of pent up demand for the Hannah Montana and Cheetah Girls products, we're thrilled to finally put them into consumers' hands," said Charlie Emby, Co-President, Play Along. "We are anticipating strong momentum through the holiday season."

With a recent Emmy® nomination for Outstanding Children's Programming, two soundtracks in the same year to debut at No.1 on the charts, and record-breaking ratings for a cable show, Hannah Montana has become a phenomenon among the tween and pre-tween audience. Since its debut as the highest rated premiere in Disney Channel history, the show has continued to win over fans with a mix of playful antics, fresh fashions and phenomenal music. The storyline revolves around a young girl named Miley Stewart who leads a secret life as pop star Hannah Montana. Fans relate to the girl-next-door character while aspiring to be like the glamorous superstar. In addition to the TV show, girls can also catch the pop star live in concert -- she's touring again this fall to 55 stadium-sized venues.

Playing up the fashion and music themes inherent to the TV series, the Hannah Montana role play line includes everything a girl could want to pretend to "rock out the show", just like Hannah Montana. Available online and at all major retailers, the new product line includes Fashion Collection Dolls, In Concert Collection (singing) Dolls, the Rockin' Electric Guitar, the Rock Star Acoustic Guitar, the Rock Star Dance Mat and two playsets: the Backstage Closet and the In Concert Stage.

With two of Disney Channel's highest rated original movies, a third movie in the works, sold-out concert tours and an original soundtrack that sold over 2 million copies to date, The Cheetah Girls have serious grrrrowl power! Based on the music, fashions and accessories from The Cheetah Girls, the new products enable young fans to emulate and pretend they're performing with The Cheetah Girls. Available online and at all major retailers, the new product line includes Fashion Collection Dolls, In Concert Collection (singing) Dolls, the Cheetah Fabulous! Dress-up Set, the Rockin' Style Keyboard, the Groovin' Dance Mat and The Cheetah Girls Tour Bus playset -- all totally "cheetah-licious" like The Cheetah Girls themselves!

My 10 year old loves HM and the Cheetah girls, she watches HM as much as she is allowed.  She also has the Cheetah Girls CDs...

seems the market likes the news too.

With this news JAKK can hopefully prove its guidance will hold for the rest of the year, hence provide more confidence for the investors. After the short-term traders sell off, JAKK should get on the rails bound north.

Yesterday's press release ...

• Hannah Montana(TM) and The Cheetah(TM) Girls Dolls Kick Off a Rockin' Holiday Season
PR Newswire (Mon 6:00am)

... comes right on the wheels of what I wrote in my previous update:

QuoteIf we take out these 8 cents to the $2.39 guidance, we get $2.31, that is, 3.3% less. And, because of this slight miss, the stock price fell 39% Ridiculous, if you ask me. Especially if we think that the 1st half is the weakest from a seasonal standpoint and that most of the company's investments for this season will only hit stores in Q3, like Hanna Montana and the Cheetah Girls, for example.

The market responded quite strongly to the press release (there wasn't any real news in it), probably because of short covering and also because the stock is so cheap from a fundamental standpoint, trading at just 9.5 times earnings.

At one point the stock was up 17% on the day, but as the general market started going down, the rally fizzled a bit and JAKK closed up "just" 6.2%. When comparing yesterday's high of $25.34 with Friday's low of $18.19, we see the stock was up 39% in two days, from bottom to top and this tells us JAKK has been incredibly volatile.

Quote from: JKN on August 13, 2007, 10:33:17 AM
My 10 year old loves HM and the Cheetah girls, she watches HM as much as she is allowed.  She also has the Cheetah Girls CDs...

seems the market likes the news too.

Thanks for sharing this feedback on JAKK's products JKN. I think Hanna Montana, Cheetah Girls and Plug it In and Play TV games can be very important for JAKK, because they may diversify the company's revenues from the traditional WWE action figures, where there are litigation issues. I don't know enough about the US toy market, but I guess that these new dolls and related toys can sell even more than WWE action figures, because WWE is kind of old and the dolls are something new which can be very appealing.

We'll see, but management is confident they can meet their full year guidance of $2.39 EPS on $800 M revenue, and I'm also confident they'll be able to achieve their goals.

If management's expectations materializes the stock will inevitably push higher above $30 a share. If they beat the numbers the $35-$40 range will be within reach.

I'll continue holding JAKK for the long term.

JAKK published two positive press releases, but failed to inspire investors due to general market jitters:

• WWE(R) SmackDown(R) vs. Raw(R) 2007 Reaches Major Sales Milestone for the Xbox 360(TM) Video Game and Entertainment System from Microsoft, PlayStation(R)2 Computer Entertainment System and PSP(R) (PlayStation(R)Portable) System
Business Wire (Tue 6:00am)

• 2007 WSSA World Sport Stacking Championships on ESPN
PR Newswire (Tue 6:00am)

The first press release made me make a brief investigation on THQ (symbol: THQI), which is a JAKK partner. THQI is a $1.88 B market cap company trading at 28 times earnings. JAKK is a $619 M market cap trading at 9 times earnings.

JAKK has it all to at meet or beat its full year guidance in 2007, and that will put the stock north of $30 in my view.