JAKKS Pacific, Inc. (JAKK)

TMFCop (< 20) Submitted: 2/21/08 12:04 PM : Start Price: $27.97 JAKK Score: -18.81

Though a smaller toymaker to rivals Mattel and Hasbro, the company's line of products and distribution put it on par with either. Wal-Mart, Target, and Toys R Us account for 60% of revenues and TRU has seen its market share growing recently.

Some of JAKKS must-have products include its Eye-Clops "bionic" eye, newly upgraded so that it can magnify objects at lower 100x levels as well as greater 400x levels. The new bug vac attachment ought to be a great seller too. Additionally, its under $100 night-vision goggles (they really work!) should prove extremely popular. Amazon has said they anticipate them being a top seller for them this year (the Eye-Clops was second only to the Wii for Amazon last year).

There's also its ties to WWE for another three years and the hugely popular Hannah Montana. They have their own in-house gadgets called "Plug It In & Play" that come with games built right in. The Atari classic games collection was a big hit a few years ago and they've borught it back as well as expanded the line.

Plush toys, a Discovery Kids line of toys, and some esoteric lines like the Spinning pens -- apparently its a huge craze in Japan and on YouTube -- could be a fun addition.

At just 11 times 2008 earnings, JAKKS is offered at a discount to either MAT or HAS and is on par with smaller rival RC2. This is a growing toymaker that hasn't been hurt by the recalls of other manufacturers and is cheap based on future growth prospects.

With $186 million cash, it's well positioned to buy the licenses it needs or develop the toys consumers want in house. At around $28 a share I find JAKKS a worthwhile investment.

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