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JAKK, MAT, LF, HAS, ERTS, THQI, Toys and Games Stocks Overvalued

^{Published on 2011-08-04 07:01:59 - WOPRAI}
 

August 4, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Toys and Games sector and these stocks are the most undervalued as of today. JAKKS PACIFIC INC (NASDAQ:JAKK), MATTEL INC (NYSE:MAT), LEAPFROG ENTERPRISES INC (NYSE:LF), HASBRO INC (NYSE:HAS), ELECTRONIC ARTS INC (NASDAQ:ERTS), THQ INC (NASDAQ:THQI) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     JAKK       JAKKS PACIFIC INC                   16.95          15.78          7.40% Overvalued            Toys and Games         
     MAT        MATTEL INC                          25.73          28.17          8.70% Undervalued           Toys and Games         
     LF         LEAPFROG ENTERPRISES INC            3.57           6.1            41.50% Undervalued          Toys and Games         
     HAS        HASBRO INC                          38.67          45.42          14.90% Undervalued          Toys and Games         
     ERTS       ELECTRONIC ARTS INC                 21.34          34.07          37.40% Undervalued          Toys and Games         
     THQI       THQ INC                             2.46           9.84           75.00% Undervalued          Toys and Games         

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

JAKKS PACIFIC INC (NASDAQ:JAKK) - JAKKS Pacific, Inc. operates as a designer and marketer of toys and consumer products, with a range of products that feature some of the popular brands and children's toy licenses in the world. Its portfolio includes action figures, electronics, dolls, dress-up, role play, halloween costumes, kids furniture, vehicles, plush, art activity kits, seasonal products, infant/pre-school, construction toys, and pet toys sold under various proprietary brands, including JAKKS Pacific, Creative Designs International, Road Champs, Funnoodle, JAKKS Pets, Plug It In & Play TV Games, Kids Only!, Tollytots, and Disguise. JAKKS is a licensee of various hundred nationally and internationally known trademarks, which include Disney, Nickelodeon, Warner Bros., Ultimate Fighting Championship, Hello Kitty, Graco, Pokmon, and Cabbage Patch Kids. The company was founded in 1995 and is based in Malibu, California.

MATTEL INC (NYSE:MAT) - Mattel, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of various toy products worldwide. Its products comprise fashion dolls and accessories, vehicles and playsets, and games and puzzles. The company offers its products under Mattel Girls and Boys brands, including Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Battle Force 5, Tyco R/C, CARS, Radica, Toy Story, Max Steel, WWE Wrestling, and Batman; Fisher-Price brands comprising Fisher-Price, Little People, BabyGear, View-Master, Dora the Explorer, Go Diego Go!, Thomas and Friends, Sing-a-ma-jigs, See N Say, and Power Wheels; and American Girl Brands, such as My American Girl, the historical collection, and Bitty Baby. It also publishes advice and activity books, as well as magazines comprising American Girl. The company sells its products directly to retailers, including discount and free-standing toy stores, chain stores, department stores, and other retail outlets; wholesalers; and distribution centers. It also markets its products through catalogue, Web site, and agents and distributors. The company was founded in 1945 and is headquartered in El Segundo, California.

LEAPFROG ENTERPRISES INC (NYSE:LF) - LeapFrog Enterprises, Inc. provides technology-based learning platforms worldwide. It provides reading systems, such as the Tag reading system, a pen-based reading system that focuses on fundamental reading skills and offers a library of software-based books; and Tag Junior reading system used for the introduction of younger children to books and reading. The company also provides educational gaming products for children comprising the Leapster educational Gaming system, Leapster, or classic Leapster, a handheld device with a multi-directional control pad and a touch-screen enabled by a built-in stylus; Leapster2 platform, which connects to the LeapFrog Learning Path; Didj Custom Gaming System, a Web-connected handheld device that allows for customization of curriculum and game play; and Crammer Study and Sound System, a hybrid music player and study device. In addition, it offers Scout collection, a line of toys; Zippity learning system, a TV-based gaming system that uses full-body movement to play educational games; Fridge Collection, a line of magnetic toys that teaches letter names, letter sounds, spelling, and learning songs to children; Learn and Groove Series, which features bilingual musical learning toys; and Clickstart, My First Computer that introduces computer and preschool skills by turning any TV into a childs first computer. Further, the company provides the LeapFrog Learning Path, an online tool that helps parents track what their children are learning with its Web-connected products. It sells its products directly to national and regional mass-market and specialty retailers; other retail stores and distributors; and school-related distributors and resellers through a combination of sales representatives, as well as through online store and other Internet-based channels. The company was founded in 1995 and is headquartered in Emeryville, California. LeapFrog Enterprises, Inc. is a subsidiary of Mollusk Holdings, LLC.

HASBRO INC (NYSE:HAS) - Hasbro, Inc. engages in the design, manufacture, and marketing of games and toys. The company principally provides childrens and family leisure time and entertainment products and services. It offers various games, including traditional board, card, hand-held electronic, trading card, roleplaying, and DVD games, as well as electronic learning aids and puzzles. Hasbros toy products include boys action figures, vehicles and playsets, girls toys, electronic toys, plush products, preschool toys and infant products, electronic interactive products, creative play products, and toy related specialty products. The company also licenses certain of its trademarks, characters, and other property rights to third parties for use in connection with consumer promotions and for the sale of noncompeting toys and games, and non-toy products. It offers its products primarily under PLAYSKOOL, TRANSFORMERS, NERF, MY LITTLE PONY, LITTLEST PET SHOP, TONKA, G.I. JOE, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, CRANIUM, AVALON HILL, TIGER, FURREAL FRIENDS, BABY ALIVE, STRAWBERRY SHORTCAKE, and WIZARDS OF THE COAST brand names. The company markets its products to various customers, including wholesalers, distributors, chain stores, discount stores, mail order houses, catalog stores, department stores, and other retailers, as well as Internet-based e-tailers. It has a strategic licensing agreement with Electronic Arts Inc. (EA), which provides EA with the worldwide rights to create digital games for various platforms, including mobile phones, personal computers, and game consoles, as well as; and a strategic relationship with Universal Pictures to produce approximately three motion pictures based on certain of companys brands. Hasbro sells its products through its own sales force and distributors primarily in the United States, Canada, Mexico, Europe, the Asia Pacific, Latin America, and South America. The company was founded in 1923 and is headquartered in Pawtucket, Rhode Island.

ELECTRONIC ARTS INC (NASDAQ:ERTS) - Electronic Arts Inc. develops, markets, publishes, and distributes video game software and content. The companys games include a range of categories, including action-adventure, casual, sports, family, fantasy, racing, music, massively-multiplayer online role-playing, simulation, and strategy. Its portfolio of properties includes various brands, such as Need for Speed, The Sims, Spore, Dead Space, Mass Effect, and Battlefield; and EA SPORTS Active, Dragon Age, Origins, and Dantes Inferno. The companys portfolio of games based on licensed intellectual property includes sports-based titles, such as Madden NFL Football, FIFA Soccer, and Tiger Woods PGA Tour, as well as titles based on brands, such as Harry Potter and Hasbro. It also co-develops, co-publishes, and/or distributes video games that are developed and published by other companies, including the MTV Games/Harmonix series Rock Band and the Crytek series Crysis. The companys games are played on various platforms, including video game consoles, personal computers, handheld game players, and mobile devices. It offers its products for videogame consoles, PCs, and handhelds on physical media, such as disks and cartridges that are sold at retailers; and game content and services online. The company provides its products through mass market retailers, electronics specialty stores, game software specialty stores, and online stores. It has operations in North America, Europe, Australia, Asia, and Latin America. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California.

THQ INC (NASDAQ:THQI) - THQ Inc. engages in developing, publishing, and distributing interactive entertainment software for various game systems. It offers its software for home video game consoles; handheld platforms; wireless devices, such as iPhone, iTouch and iPad; and personal computers (PC), including games played online. The company also develops and publishes titles for digital distribution, as well as offers PC titles through online download stores and services. In addition, it produces and markets action, fighting, racing, shooter, and strategy games primarily for avid or core gamers; games for the mass market and families; and online games. The company markets and distributes games directly to mass merchandisers, consumer electronic stores, discount warehouses, and other retail chain stores in the United States; and on a direct-to-retail basis, as well as through Internet and wireless devices internationally. THQ Inc. was founded in 1989 and is based in Agoura Hills, California.

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