Currently trading at 18.8 times its earnings, giving it a 28% discount to the industry average, a dividend yield of 3.13%, while the price is reaching the 52-week high, the stock is undervalued and very attractive. It is recommended to hold on this one, though, until new acquisitions prove to serve evolving market preferences.
Hardly surviving
Children toys designer and producer JAKKS Pacific, Inc. (NASDAQ:JAKK) holds in its portfolio a wide array of licenses for several lines and brands of toys. Some of its most successful segments are action figures, electronics, dolls, Halloween costumes, kids furniture, seasonal products, construction toys, ride-on vehicles, inflatable environments and tents.
JAKKS Pacific, Inc. (NASDAQ:JAKK) is currently dealing with an adverse economic environment, which is negatively affecting the firm’s overall performance. Also, the DreamPlay project has diminished operating margins and increased marketing costs. In addition, the company does not have other products that will be introduced any time soon. Finally, age compression has further compromised the company’s future.
The balance sheet does not reflect a good performance for the last couple of years. Today, the firm is losing money while revenues, net income, and cash flow continue a 3 year downward trend. Meanwhile debt levels did not see much change through the last decade. Overall JAKKS Pacific, Inc. (NASDAQ:JAKK)‘ future is gloomy.
Trading at 25.29 consensus earnings, carrying a 15% premium to the industry consensus, holding a 2.99% dividend yield and a price tag closer to its 52-week low, the stock is a little overvalued and not very attractive. It is recommended to hold since the company is entering financial turbulence, and the economic environment is expected to continue a slow recovery pattern.
Not for kids
JAKKS Pacific, Inc. (NASDAQ:JAKK) is the most complicated of the three because new products did not have the expected impact on performance. Hasbro, Inc. (NASDAQ:HAS) is performing better, especially when looking at its finances. Last, Mattel, Inc. (NASDAQ:MAT) is the best position given its effective portfolio and successful recent product introduction.
Vanina Egea has no position in any stocks mentioned. The Motley Fool recommends Hasbro and Mattel. The Motley Fool owns shares of Hasbro. Vanina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Toys Are Not for Kids originally appeared on Fool.com is written by Vanina Egea.
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