On June 26th, we introduced the “Brave” Index. This morning, Jakks Pacific (JAKK) tripled its forecast for sales of merchandise from the Walt Disney (DIS) film “Brave” based on purchases over the past two weeks. The company also expects several items to be sold out in the next month.
According to a company spokesperson, Jakks expects to double the number of “Brave” products in time for the movies DVD release this Christmas. This is a significant break for the toy manufacturer who has been a victim of the weak consumer spending environment. Sales has dropped for the last 3 years.
In addition to the ‘Brave’ products, the company is also relying on the Pokeman and Hello Kitty brands. Major customers of Jakks are Wal-Mart (WMT) Target (TGT) and Toys ‘R’ US (TOYS). These 3 largest customers accounted for 44% of the net receivables. Given the seasonality of the retail business, Halloween and Christmas sales will be significant for the company. Jakks is expected to report quarter ended June 30th earnings on July 20th, 2012.
A reminder, most recently, Jakks and Oaktree Capital Management (OAK: Oaktree Capital Group) ended negotiations on a confidentiality and standstill agreement about a potential takeover.
The Top 5 Holders of JAKK stock as of 6/26/2012 are Fidelity Management, Dimensional Fund, AQR Capital Management, Vanguard Group and Oaktree Management.
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