JAKKS Pacific Inc. (JAKK) has recently inked exclusive agreements to expand the global distribution of toys based on Monsuno, with Planet Fun for the New Zealand territory and Prima Toys for the South African territory. Earlier, the company announced inclusive agreements with Giochi Preziosi for Pan European toy distribution and Hunter Products for Australia.
The company has been taking initiatives to strengthen its international business. Ventures in the U.K., Spain and France are gaining momentum. Monsuno is one overseas property of JAKKS that is presently drawing considerable attention. This is an animated Japanese television series, likely to be on air in spring 2012. Based on this television venture, the company developed a complete Monsuno toy line and plans to launch it next year.
In the second quarter of 2011, JAKKS Pacific, Dentsu Entertainment and FremantleMedia Enterprises announced a global content distribution deal with leading children's entertainment network Nickelodeon, for worldwide broadcast rights to Monsuno. Nickelodeon will launch the series to audiences on owned channels in the United States, Latin America, the United Kingdom, key European and Eastern European territories, Australia and New Zealand, India, Southeast Asia, Russia and Africa.
In October 2010, The Topps Company, a creator and market of collectibles, trading cards, and confectionary products, became a partner and investor in the production of the Monsuno animated television series. Topps has plans to produce trading card games, confectionary item and other products.
We believe Monsuno will play a major catalyst for long-term earnings. It is likely to create a dominant position in the boys’ action zone for years to come. The concept will lead to increased market share, more consistent growth and more profitable future for JAKKS Pacific. However, the company’s boys’ segment will face stiff competition from its peer Hasbro Inc. (HAS).
JAKKS Pacific currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain our long-term Neutral recommendation on the stock.
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