JAKK

[David Randolph]

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

Lol, good luck Amarens

I try to ignore short term fluctuations and try to focus on the main direction. Earnings will be out before tomorrow's open, so I'll update this analysis when we have the numbers.

[David Randolph]

I try to ignore short term fluctuations and try to focus on the main direction. Earnings will be out before tomorrow's open, so I'll update this analysis when we have the numbers.

No, earnings were not out, nothing happened. I thought they would be released today because of "historical evidence" given by Knobias:

TABLE: Unconfirmed Earnings Expected Wednesday, Jul 18

The stock fell a bit today on profit taking, I'll keep holding JAKK.

[David Randolph]

JAKK will announce earnings next Wednesday:

• JAKKS Pacific to Announce Results for Second Quarter 2007
Business Wire (Thu 5:00pm)

I believe the company will post better than expected results, as it did over the past three quarters:



For some reason the stock is near an all time high.

[David Randolph]

JAKK is going through a consolidation period, after the nice bull run it had to new all time highs. I expect results on Wednesday to positively surprise investors.

[David Randolph]

JAKK continues to go through a consolidation period, but I expect earnings to positively surprise investors when they're released next Wednesday.

Today when I went to the local supermarket I saw a couple of kids buying JAKK's WWE action figures, and they were very excited about them ... later, at dinner, I saw on TV that those toys were being advertised with bolycaos, a chocolate bread all kids here in Portugal eat (don't know about the rest of Europe).

JAKK had just 12% of revenue coming from Europe, but I believe that's going to expand a lot in the future. No doubts I'll keep holding JAKK.

[Amarens]

JAKK continues to go through a consolidation period, but I expect earnings to positively surprise investors when they're released next Wednesday.

Hi David,

I understood release is tomorrow.

July 19, 2007 - 4:01 PM EST     
JAKKS Pacific to Announce Results for Second Quarter 2007

JAKKS Pacific, Inc. (Nasdaq:JAKK) will announce 2007 second quarter and first six months results on Wednesday, July 25, 2007 before the stock market opens. The Company will also hold a teleconference and webcast to discuss these results and may discuss future plans and prospects.

Anyone interested will be able to listen to the teleconference, scheduled to begin at 10:30 a.m. ET (7:30 a.m. PT) on July 25th, via the Internet at www.jakkspacific.com, www.CompanyBoardroom.com, or www.StreetEvents.com. These websites will host an archive of the teleconference for 30 days.

A telephonic playback will be available from 11:45 a.m. ET on July 25th through 12:00 a.m. ET on August 25th. The playback can be accessed by calling 800-642-1687, or 706-645-9291 for international callers, pass code "1256686."

[David Randolph]

Arghhh, below expectations:

• JAKKS Pacific Reports 2007 Second Quarter and First Six Month Results
Business Wire (Wed 5:55am)

Reiterates guidance of $800 M in revenues and $2.39 EPS for full year 2007. This quarter isn't very important, because, as for most retailers, the 4th quarter has most of the sales.

But it's a pity because I was counting on JAKK to provide a nice boost to the Main Portfolio, but it looks like it will be more of a drag today

I'll continue holding anyway, because the stock is trading at 12.5 times earnings and the industry average trades at 25 times earnings and I don't think the discount is warranted. I see today's probable sell off as a long term buying opportunity.

[berloga]

Perhaps we should acknowledge the rule of not holding through the earnings of any company. The setbacks are huge and painful. There is no reason to count the examples. The reward may be good if earnings are good, but it is better to have no gain than a large loss, no? However, it is tempting to hold through earnings... 

[David Randolph]

Perhaps we should acknowledge the rule of not holding through the earnings of any company. The setbacks are huge and painful. There is no reason to count the examples. The reward may be good if earnings are good, but it is better to have no gain than a large loss, no?

The problem of not holding through earnings is that one needs to be a short term trader to do that, not an investor. One has to decide to never hold a stock for more than 3 months.

That's not a good idea in my view.

I guess one needs to realize the stock market is a risky game and there will always be setbacks, as there are no perfect strategies. If the winners win more than the losers lose, one comes out ahead over the long term.

It's very hard to defend a stock that is going down 17% on the day ... curiously the chart was wrong too, since it was clearly pointing to a positive earnings surprise, as the stock was trading near all time highs and went up yesterday, even as the general market went down 2% plus.

Maybe one of the stocks that broke down technically, take GIGM as an example, will rise 20% on its earnings day, to compensate for JAKK's miss ... since the chart doesn't know anything.

[David Randolph]

Motley Fool came out with an article that explains fairly well why JAKK is a bargain at current prices:

Wan-Eyed JAKKS

My take is the 2nd quarter isn't all that important, since the second half of the year (especially the 4th quarter) has most of the sales and profits of the company. A weaker or stronger second quarter doesn't mean much about the company.

It seems to me the market overreacted to the news because in 2006 JAKK also had a very optimistic guidance and then failed to deliver. But that's not the case this year, since EPS guidance for 2007 is just 9 cents higher than the 2006 EPS of $2.3.

I think management is being fairly conservative and will be able to beat their own guidance when the year is finally over. This quarter is meaningless for that outcome in my view.

I'll keep on holding JAKK.

[David Randolph]

JAKK touched its 200 days SMA support and bounced a bit. I don't think it falls any further, in fact, I'm pretty much certain that, given the fundamentals, the stock will close the year comfortably above $30. We'll just need to have a looooootttt of patience.

There were some news out yesterday:

• JAKKS Pacific(R) Signs Licensing Agreement for Wow! Wow! Wubbzy!
Business Wire (Thu 6:00am)

[BigSully1]

It seems to me the market overreacted to the news because in 2006 JAKK also had a very optimistic guidance and then failed to deliver. But that's not the case this year, since EPS guidance for 2007 is just 9 cents higher than the 2006 EPS of $2.3.

I think management is being fairly conservative and will be able to beat their own guidance when the year is finally over. This quarter is meaningless for that outcome in my view.

I'll keep on holding JAKK.
[/quote]

David, do you still think they can deliver this time given the margin pressure (35% gross margin compared to 39.7% in previous year) and the earnings shortfall? I really doubt it.  I considered the report very ugly and shorted it accordingly. My opinion is sell.

[David Randolph]

David, do you still think they can deliver this time given the margin pressure (35% gross margin compared to 39.7% in previous year) and the earnings shortfall? I really doubt it.  I considered the report very ugly and shorted it accordingly. My opinion is sell.

Hi BigSully1, congrats on your trade

Well, if you consider that in the first six months of 2006 JAKK made $0.31 profit per share and in the first 6 months of 2007 it made $0.30 per share, I don't see why not delivering $2.39 in 2007 versus $2.30 in 2006.

It's clear that the first half doesn't mean much for the full year revenues or profits. I maintain that the market is overreacting to the news of a weaker than expected quarter, a quarter that doesn't have much relevancy for the full year, therefore I see JAKK's current sell off as a long term buying opportunity, not a selling opportunity.

Anyway, it makes me sick to see it down this much so quickly, since it took months to go up over $30 ... it makes me sick, but it's reality, congrats to the short term swing traders.

I'll continue holding JAKK.

[tokyopua]

JAKK just promoted on CNBC by a guy whose name was Al Frank (I think).  He said its only trading at a PE of 10, they reaffirmed guidance, and that JAKK had its own little bear market since earnings, so is a good buy.

[David Randolph]

JAKK just promoted on CNBC by a guy whose name was Al Frank (I think).  He said its only trading at a PE of 10, they reaffirmed guidance, and that JAKK had its own little bear market since earnings, so is a good buy.

Thanks for the information Tokyopua

I've heard JAKK's conference call and management expects a very strong 2nd half of the year, with several new product lines hitting the shelves. They're particularly excited about Hanna Montana's doll.

I don't understand why a company with JAKK's potential is trading at just 10 times earnings ... I guess it is just cheap!

BigSully1 says "sell" because he thinks the company won't deliver on its promises and will and earn less than the expected $2.39 per diluted share. I would say that's the market expectation too. The company just has to deliver on its promises for the market to be positively surprised ... I believe that's what's going to happen.

I'll keep holding JAKK.