7/18/2013

This Stock was Down 40% Today, Previous Value Opportunity


For the period ending 03/31/13 the following institutions held position in this stock that dropped 40% today (06/18/13);  

Third Avenue Management LLC (6.52% of shares outstanding), Pzena Investment Management LLC (6.94% of shares outstanding), Royce, Kennedy, Blackrock.
The stock also had large insider purchase during 2013 above 10 per share.

None of this makes it a value stock even after today massive 40% drop. But it does make it a candidate for a closer a look.


JAKKS Pacific is the 3rd largest toy-maker in the US. The Company develops, produces and markets consumer toys, electronic products, pet toys and related products, and other consumer products.

Today the stock was crushed after reporting a 27% reduction in sales along with a 106.2M loss or 2.14 per share. Wall Street was expecting a profit of .05 per share not a 2.14 per share loss. Furthermore, “JAKKS slashed its full-year revenue guidance to $620 million from its previous forecast of $694 million to $700 million, and it now estimates EPS losses of $2.56 when it had previously anticipated reporting a profit of $0.63-$0.68 per share this year.” The company also announced a restructuring, third quarter jobs cuts , stores closed and/or rental leases not renewed, and other expenses cut. JAKKS also suspended its quarterly dividend until the company returns to profitability.
Lastly the announced dividend cut is clear indication cash conservation is now a priority.

The risk is real in the highly competitive toy industry but building a position with a longer term outlook may outperform in this extended market.


Price = 7.00
Market Cap : 153.29M , Enterprise Value : 237.10M
Price/Sales (ttm): 0.37 ,Price/Book (mrq): 1.42
Enterprise Value/Revenue (ttm): 0.35 , Enterprise Value/EBITDA (ttm): 21.31
Revenue (ttm): 671.43M , Revenue Per Share (ttm): 29.23
Qtrly Revenue Growth (yoy): 6.40%, Gross Profit (ttm): 197.94M
EBITDA (ttm): 11.13M
Total Cash (mrq): 165.58M , Total Cash Per Share (mrq): 7.56
Total Debt (mrq): 153.51M , Total Debt/Equity (mrq): 86.36
Current Ratio (mrq): 1.85 , Book Value Per Share (mrq): 8.11
52-Week Change3: -56.25% , S&P500 52-Week Change3: 22.45%
52-Week High (Sep 6, 2012)3: 16.70 , 52-Week Low (Jul 18, 2013)3: 6.90
Shares Outstanding: 21.91M , Float: 18.14M
% Held by Insiders: 16.98% , % Held by Institutions: 89.10%

Short % of Float (as of Jun 28, 2013): 11.70%

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