On June 16, 2015 we initiated a long position in JAKKS Pacific Inc. (NASDAQ:JAKK) when shares were trading at around $8.85 and stated we would continue our due diligence process and likely look to add to our position.

Jakks Pacific – A Potential Acquisition Target

Recent 13D activity, value on analyst EPS estimates, and a June 8th, 2015 Seeking Alpha article highlighting Jakks Pacific as a prime buyout target has piqued our interest.   At the time of the article, the stock was trading at around $8.00.  Quote from the author:

“The company’s relationship with Disney is expanding rapidly and JAKK’s forward EBITDA multiple is just 2.5x. This provides an easy path to a $16 buyout (100% upside from current levels).”

Our analysis coincides with the author’s buyout/takeover scenario.

Jakks Pacific is a leading designer and marketer of toys and consumer products with a wide range of products that feature popular brands and children’s toy licenses.

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