Jakks Pacific (JAKK) Flagged As Strong On High Volume - TheStreet

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Jakks Pacific

(

JAKK

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Jakks Pacific as such a stock due to the following factors:

  • JAKK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • JAKK has traded 212,495 shares today.
  • JAKK is trading at 2.83 times the normal volume for the stock at this time of day.
  • JAKK is trading at a new high 5.11% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on JAKK:

JAKKS Pacific, Inc. designs, develops, produces, and markets consumer products in the United States and internationally. It operates in two segments, Traditional Toys and Electronics; and Role Play, Novelty and Seasonal Toys. Currently there are 4 analysts that rate Jakks Pacific a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Jakks Pacific has been 685,300 shares per day over the past 30 days. Jakks Pacific has a market cap of $158.7 million and is part of the consumer goods sector and consumer durables industry. Shares are up 2.4% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Jakks Pacific as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk.

Highlights from the ratings report include:

  • The gross profit margin for JAKKS PACIFIC INC is currently lower than what is desirable, coming in at 28.61%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 12.61% is above that of the industry average.
  • Currently the debt-to-equity ratio of 1.80 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, JAKK's quick ratio is somewhat strong at 1.44, demonstrating the ability to handle short-term liquidity needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Leisure Equipment & Products industry and the overall market, JAKKS PACIFIC INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • JAKKS PACIFIC INC's earnings per share declined by 7.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JAKKS PACIFIC INC continued to lose money by earning -$3.02 versus -$4.96 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus -$3.02).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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