2nd Investment Club Meeting 9/22/2006 - PowerPoint PPT Presentation

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2nd Investment Club Meeting 9/22/2006

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  1. 2nd Investment Club Meeting 9/22/2006

  2. Brief Commentary • FedEx estimates that U.S. gross domestic product for the rest of 2006 will growth at 2.7% • Intel • ISRG • Drugstores • XMSR • Oil

  3. Jakks Pacific JAKK 9/22/2006

  4. What does Jakks Pacific do? • Sells all types of toys in the following markets: • United States, Europe, Australia, Canada, Latin America, and Asia • Exclusive Contracts: • WWE Partnership for video games such as WWE SmackDown, WWE RAW, WWE WrestleMania Nickelodeon, Disney, and Marvel

  5. Random Products • Dog treats that remove tartar • TVGames for young kids • http://www.jakkstvgames.com/ • Stationary • Benefits of wide product range? • Sales 33% of Sales are from Wal-Mart

  6. Industry Overview • Very cyclical and up to consumer whims. • Huge reward but of course if there is a huge reward there is a considerable amount of risk involved

  7. Potential Growth • Earnings Yield (EBIT/Enterprise Value) 107.77M /487.67M =22% The stock is trading at a discount relative to its earnings. We should take advantage of this great value • Added Bonus: -High Return on Capital -PEG Ratio (5 yr expected):0.74

  8. Does this fit in our Portfolio? • Yes, exposure to small Cap. • More Risk Involved • Currently overweigh in Large Cap

  9. Risks • Lack of brand name • Cyclical ~consumer spending • Fed tightening But... Jakk has a current Ratio of 3.61 • The Good • The Bad

  10. Proposal • Buy $5000 of Jakks Pacific (about 280 shares)