Is JAKKS Pacific (NASDAQ:JAKK) way too risky for millennials?

Lets try to examine the odds of JAKKS Pacific to fully recover from the recent plunge as its shares went up 17.09%. JAKKS Pacific's current daily volatility is 4.13 percent, with a beta of 0.33 and an alpha of -0.7 over DOW. While some millenniums are indifferent towards recreation, it makes sense to examine JAKKS Pacific. Why are we still confident in our projection for a recovery.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

JAKKS Pacific currently holds roughly 48.13 M in cash with 18.79 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 12.88, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Investing in JAKKS Pacific, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding JAKKS Pacific along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of JAKKS Pacific's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as JAKKS Pacific. Your research has to be compared to or analyzed against JAKKS Pacific's peers to derive any actionable benefits. When done correctly, JAKKS Pacific's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in JAKKS Pacific.

How important is JAKKS Pacific's Liquidity

JAKKS Pacific financial leverage refers to using borrowed capital as a funding source to finance JAKKS Pacific ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. JAKKS Pacific financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to JAKKS Pacific's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of JAKKS Pacific's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between JAKKS Pacific's total debt and its cash.

JAKKS Pacific Correlation with Peers

Investors in JAKKS can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in JAKKS Pacific. Diversification will allow for the same portfolio return with reduced risk. The correlation table of JAKKS Pacific and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities JAKKS is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of JAKKS for more details

A Deeper Perspective On JAKKS Pacific

JAKKS Pacific holds Efficiency (Sharpe) Ratio of -0.15, which attests that the company had -0.15% of return per unit of risk over the last month. Macroaxis approach towards determining the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. JAKKS Pacific exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check out JAKKS Pacific to validate the risk estimate we provide.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Our perspective of the recent JAKKS Pacific surge

The value at risk is down to -7.48 as of today. JAKKS Pacific exhibits very low volatility with skewness of -1.02 and kurtosis of 3.25. However, we advise investors to further study JAKKS Pacific technical indicators to make sure all market info is available and is reliable.

Our Bottom Line On JAKKS Pacific

Although some firms in the leisure industry are either recovering or due for a correction, JAKKS may not be as strong as the others in terms of longer-term growth potentials. The inconsistency in the assessment between current JAKKS valuation and our trade advice on JAKKS Pacific is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to JAKKS Pacific.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of JAKKS Pacific. Please refer to our Terms of Use for any information regarding our disclosure principles.

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