3SOF

Thanks for the article and Nielsen ratings, capricho and basanlas

Expectations for JAKK in Q3 and full year 2007 are the following:



Now I see that I've been so focused on the market reaction after that slight earnings miss in Q2 and the company's product pipeline that I missed the fact that Q3 is actually the strongest quarter for JAKK from a seasonal standpoint.

It has been that way historically and analyst's estimates confirm it. I guess this is because retailers buy the toys from JAKK in advance of Christmas.

I remember that JAKK's CEO talked about how retailers were enthusiastic about Hannah Montana's related products.

I'm confident that JAKK will raise full year 2007 guidance at the conference call, and possibly even provide 2008 guidance.

Today would be the last day to sell before earnings, but I'm not going to do that, I'll hold through earnings and probably beyond.

JAKK's 3rd quarter earnings will be released on Monday before the open, so I'll write a new update right after that. Moreover I'll listen to the conference call (scheduled for 10 AM ET) and will give you some highlights.

The trading plan will be set tomorrow after earnings.

I wonder if JAKK will still be able to release earnings tomorrow as their Corporate Headquarters is on the PCH in Malibu and the fires down there are pretty bad... http://www.cnn.com/2007/US/10/21/wildfire.ca/index.html

Nevermind, earnings are out!

Jakks Pacific 3rd-quarter net up 17% on 7.6% higher sales:

JAKK 26.55, -0.19, -0.7%) the Malibu, Calif., maker of toys and consumer products, reported third-quarter earnings rose 17% on 7.6% higher sales. Net income reached $47.3 million, or $1.45 a share, from $40.5 million, or $1.28, in the year-earlier period. Sales rose to $318.4 million from $295.8 million. A survey of analysts by Thomson Financial produced a consensus estimate of $1.30 of profit on sales of $301 million for the quarter. The company affirmed that it would at least match its 2007 estimate of earnings of $2.39 a share on sales of $800 million. Thomson's survey is looking for earnings of $2.38 and sales of $802 million

Quote from: trexkerry on October 22, 2007, 05:35:04 AM
Nevermind, earnings are out!

Jakks Pacific 3rd-quarter net up 17% on 7.6% higher sales:

JAKK 26.55, -0.19, -0.7%) the Malibu, Calif., maker of toys and consumer products, reported third-quarter earnings rose 17% on 7.6% higher sales. Net income reached $47.3 million, or $1.45 a share, from $40.5 million, or $1.28, in the year-earlier period. Sales rose to $318.4 million from $295.8 million. A survey of analysts by Thomson Financial produced a consensus estimate of $1.30 of profit on sales of $301 million for the quarter. The company affirmed that it would at least match its 2007 estimate of earnings of $2.39 a share on sales of $800 million. Thomson's survey is looking for earnings of $2.38 and sales of $802 million

Beat estimates by 15 cents

• JAKKS Pacific(R) Reports 2007 Third Quarter Results
Business Wire (Mon 3:30am)

The following gives me absolute confidence that they'll beat 2007 guidance:

«Net sales for the nine months ended September 30, 2007 were $572.0 million, compared to $527.1 million during the same period in 2006. Net income for the first nine months of 2007 was $55.6 million, or $1.75 per diluted share, compared to the first nine months of 2006 earnings of $49.2 million, or $1.57 per diluted share.»

They're running 18 cents ahead when compared to what they made in 2006, which was EPS of $2.3. So, I expect at least $2.48, compared with the $2.39 guidance. However, given the positive momentum evidenced in Q3 and the following comments ...

"We are proud of our most expansive product line to date and are seeing positive momentum at retail thus far into the fourth quarter. We believe both JAKKS and our product lines are well positioned for the 2007 holiday season."

... I believe the 4th quarter of 2007 will be stronger than Q4 in 2006, when JAKK made $0.73 EPS. If they make, say, $0.8 in the 4th quarter, the full year EPS will be $2.55.

The stock appears to be trading at 10.4 times earnings and growing nicely, while the Toys industry trades at 20.2 times earnings.

JAKK should gap up over $30 this morning, we'll see how the market responds to the fundamental information. I'll continue holding JAKK for the long term.

This market can be very inefficient at times. Just notice that Cramer's "bullshit" and misleading information brought more volume and price appreciation to JAKK than the company's spectacular 3rd quarter earnings release

So, the market's response wasn't a big gap up as I was expecting, it will otherwise be a slow but consistent rise between now and the end the of the year.

I just heard the conference call and I have no doubts that JAKK will firmly exceed its 2007 guidance of $800 M revenue and $2.39 EPS. It's just that after the market's response to the 2nd quarter slight earnings miss, management prefers to be conservative and beat guidance when they report full year numbers in February.

Hannah Montana related products are still ramping up towards the holiday shopping season, as the products still contributed with less than 10% to overall sales, which came in better than expected.

I expect JAKK to close this year around $35 a share, that is, about 25% higher than what it is now, and further upside in 2008.

I'll continue holding JAKK for the long term.

JAKK makes me scratch my head ... I don't understand why it doesn't go up, even though I know this market can be very inefficient at times, and, as I've said, JAKK is a good example, since Cramer's erroneous information brought more volume and price appreciation to JAKK than the spectacular 3rd quarter earnings.

Hmm, but now I got a "click", I remember Cramer said "management will raise guidance", and since they didn't, perhaps some people felt disappointed and are selling the stock.

However, from reading the earnings press release and listening to the conference call, I have no doubts that JAKK will beat the 2007 guidance by a good margin, even though they didn't raise it. My take is management didn't raise guidance because they prefer to beat it, since when they slightly missed it in Q2 the stock dived 40%

I'll continue holding JAKK for the long term.

When I saw JAKK trading below $26 on Friday I had to pinch myself to see if I wasn't having a nightmare or something, because it doesn't make any sense at all while I'm awake. Fortunately it closed above $26 to alleviate my pain.

Of course, I'm exaggerating here and the pain doesn't come from winning or losing a few dollars, it comes from the fact that the market response to events is so different from what I think it should be. It makes me think if I am wrong, or not seeing something.

But, at least for a couple weeks more I'll just keep believing the market is very inefficient at times and it may take several days to respond to a meaningful positive event, like JAKK's 3rd quarter earnings release.

Hannah Montana is defying Barbie this holiday season:

Move over Barbie, Hannah Montana is here

I have no doubts JAKK will earn more than $2.39 in 2007 and the long term outlook is quite appealing. It doesn't make any sense to have this American company trading at 10-12 times earnings.

I'll continue holding JAKK for the long term.

Hannah Montana is gathering more momentum than Barbie for the upcoming holiday season:

Move over Barbie, Hannah Montana is here

And Barbie's owner, Mattel, trades at 14.65 2007 earnings and JAKK trades at 10.4 times earnings (I'm considering $2.5 EPS in 2007).

This isn't right. JAKK need to go up at least 40% ... I'm pretty sure we'll see JAKK above $35 in six months time and I'll continue holding JAKK for the long term.

While JAKK was trading below $26 I felt sad and talked to my wife (who by the way reads most of my daily updates and enjoys talking about the stock market), saying "I don't understand this stock". And she told me ... "JAKK's problem is that it is an old business, it doesn't have sex-appeal".

Probably she's right, that's JAKK's problem over the short term. But, if we think of Warren Buffet's and Peter Lynch strategies, for example, this is exactly the kind of businesses they would love to buy.

Buffet has been buying railroads recently, can you think of an older and more boring business? And yet he's the greatest investor ever, isn't he?

Well, JAKK is back above $26 now, so let me just forget that it ever closed below it. I remain confident that we'll see $35 a share before May 2008 and I'll keep holding JAKK for the long term.

QuoteWell, JAKK is back above $26 now, so let me just forget that it ever closed below it. I remain confident that we'll see $35 a share before May 2008 and I'll keep holding JAKK for the long term.

Brrr, what a nasty sell off yesterday. Technically we still have the 50 and 200 days SMA supports, and a small gap to perhaps close at $24.37 (2.4% below yesterday's close).

Anyway, JAKK is trading below 10 times earnings and I see these earnings as very reliable, whatever the economic environment is, because, as JAKK's CEO says, JAKK sells cheap toys which most US parents can afford without any problem, and one thing parents won't save is on cheap toys for their children.

JAKK is very cheap so the downside is limited by the company's value and fundamental trends show persistent growth over the years.

I'll continue holding JAKK for the long term.

QuoteBrrr, what a nasty sell off yesterday. Technically we still have the 50 and 200 days SMA supports, and a small gap to perhaps close at $24.37 (2.4% below yesterday's close).

JAKK really doesn't like to leave gaps open (at least not the ones in the south part of the chart), it had to fill that small gap at $24.37, even though fundamentals clearly pointed in the other direction. It also touched the 50 days and 200 days SMA supports.

I expect JAKK to restart trading on fundamental information and move towards $35 a share over the next 6 months or so. I'll keep holding JAKK for the long term.

JAKK put out another press release, but it seems nobody cares:

• WWE(R) SmackDown(R) vs. Raw(R) 2008 Kicks off Global Marketing Campaign on WWE(R) Monday Night RAW(R)
Business Wire (Mon 4:01pm)

I hope the game sells well, THQ and JAKK seem to be doing a tremendous promotional effort. THQ's partnership is mildly important for JAKK, it contributed with $3.117 M to net income in the nine month period so far in 2007, or 5.6% of the $55.59 M total net income.

JAKK is so undervalued it hurts. The Fools did a promotional article where they mentioned JAKK:

• A Triple in the Making
at Motley Fool (Mon 3:02pm)

If I were Warren Buffet I would just buy this company. Since I'm not I'll just sit tight and keep holding my shares for the long term.

David, I agree with your wife.  JAKK is not sexy. At least it is not as sexy as MCZ.

Quote from: David Randolph on November 01, 2007, 05:31:19 AM
While JAKK was trading below $26 I felt sad and talked to my wife (who by the way reads most of my daily updates and enjoys talking about the stock market), saying "I don't understand this stock". And she told me ... "JAKK's problem is that it is an old business, it doesn't have sex-appeal".

Probably she's right, that's JAKK's problem over the short term. But, if we think of Warren Buffet's and Peter Lynch strategies, for example, this is exactly the kind of businesses they would love to buy.

Buffet has been buying railroads recently, can you think of an older and more boring business? And yet he's the greatest investor ever, isn't he?

Well, JAKK is back above $26 now, so let me just forget that it ever closed below it. I remain confident that we'll see $35 a share before May 2008 and I'll keep holding JAKK for the long term.

QuoteDavid, I agree with your wife. JAKK is not sexy. At least it is not as sexy as MCZ.

JAKK is 10 times larger than MCZ, it's not comparable. MCZ's operations compete, in my view, with a small harm of JAKK's business, which is the Plug it in & Play TV games. Comparing the two offers I prefer the 2nd, because it costs less and it isn't just a controller, it brings the whole game.

Anyway, good luck with MCZ hyhl, I hope it reaches $2

JAKK is another holding of the Main Portfolio which is independent of the economic cycle. And it is trading at about 10 times earnings, while growing them nicely.

I'll keep holding JAKK for the long term.