JAKK

Major Shareholder of JAKKS Pacific($JAKK) Buys $394K in Shares After 30% Price Drop, Signaling Strong Insider Confidence

03/24/2025 23:47

Major shareholder Lawrence I. Rosen of JAKKS Pacific Inc ($JAKK) has purchased approximately $394,330 worth of shares on March 24, 2025, a significant insider buy occurring after the stock had fallen about 30% from its recent peak. This move signals confidence from a key insider at the toy and consumer products company. Rosen acquired 15,165 shares at an average price of $26.00, continuing a pattern similar to his previous purchase in June 2024, when he bought 10,088 shares for approximately $177,213 at $17.57 per share. Following that earlier purchase, JAKKS stock nearly doubled, climbing to over $34 by mid-February 2025. What makes Rosen's recent buying particularly noteworthy is its timing after a substantial correction. The company's stock reached a 52-week high of $34.61 on February 19, before declining approximately 30% to trade around $25 by mid-March. This context suggests Rosen views the current price levels as attractive and potentially undervalued. In contrast, CFO John Louis Kimble sold 48,253 shares at $27.62 for approximately $1.33 million in November 2024. However, this sale was executed according to a pre-established 10b5-1 trading plan adopted on May 20, 2024, indicating it was likely part of personal financial planning rather than a negative outlook on the company's prospects. JAKKS Pacific has demonstrated strong financial performance recently. In its third-quarter results announced in October 2024, the company reported earnings of $4.79 per share, significantly exceeding analyst expectations of $4.03, while revenue increased by 3.8% year-over-year to $321.61 million. On an annual basis, the company has generated approximately $691.04 million in revenue with net income of $35.25 million. Currently, JAKKS Pacific trades at a price-to-earnings (P/E) ratio of 7.83, which appears relatively undervalued compared to industry averages. Its price-to-sales (P/S) ratio of just 0.38 further suggests the stock may be trading at a discount relative to its revenue generation capacity. Analysts maintain a strong buy consensus rating on JAKKS Pacific, with an average price target of $41.00, representing approximately 67% upside potential from current levels. This positive analyst sentiment reflects confidence in the company's solid financial performance and growth prospects. JAKKS Pacific employs a strategy of developing popular character merchandise through licensing agreements with major entertainment companies like Disney and Sony. The announcement of a licensing agreement for 'Demon Slayer: Kimetsu No Yaiba' in June 2024 exemplifies this strategic direction. In the highly competitive toy and entertainment products market, JAKKS has been strengthening its market position through diverse licensing partnerships and product portfolio diversification. The recent improvements in financial performance suggest this strategy is proving effective. Investors should note that the toy industry is highly seasonal, which can lead to significant quarterly performance variations. According to February 2025 estimates, a loss of 73 cents per share is expected for the first quarter, reflecting this seasonal nature of the toy business. In conclusion, major shareholder Lawrence Rosen's recent purchase appears to be a positive signal regarding JAKKS Pacific's long-term value and growth potential at current price levels. Considering the company's solid financial condition, reasonable valuation, and positive analyst outlook, investors may want to take note of this insider buying signal.

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