Is JAKKS Pacific, Inc. (JAKK) Going to Burn These Hedge Funds?

JAKKS Pacific, Inc. (NASDAQ:JAKK) was in 9 hedge funds’ portfolio at the end of the first quarter of 2013. JAKK has seen a decrease in support from the world’s most elite money managers recently. There were 14 hedge funds in our database with JAKK holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of indicators shareholders can use to analyze the equity markets. Two of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outpace their index-focused peers by a significant margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are a number of motivations for an insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).

Consequently, let’s take a look at the key action encompassing JAKKS Pacific, Inc. (NASDAQ:JAKK).

What does the smart money think about JAKKS Pacific, Inc. (NASDAQ:JAKK)?

In preparation for this quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -36% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in JAKKS Pacific, Inc. (NASDAQ:JAKK). Pzena Investment Management has a $16.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Third Avenue Management, managed by Martin Whitman, which held a $15.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include John W. Rogers’s Ariel Investments, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.

Since JAKKS Pacific, Inc. (NASDAQ:JAKK) has witnessed bearish sentiment from hedge fund managers, we can see that there was a specific group of hedgies that elected to cut their entire stakes heading into Q2. Interestingly, Jason F. Harris’s Kendall Square Capital said goodbye to the biggest stake of the 450+ funds we key on, valued at about $2 million in stock.. Chuck Royce’s fund, Royce & Associates, also cut its stock, about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 5 funds heading into Q2.

What do corporate executives and insiders think about JAKKS Pacific, Inc. (NASDAQ:JAKK)?

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last half-year time frame, JAKKS Pacific, Inc. (NASDAQ:JAKK) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to JAKKS Pacific, Inc. (NASDAQ:JAKK). These stocks are Mattel, Inc. (NASDAQ:MAT), Hasbro, Inc. (NASDAQ:HAS), Kid Brands Inc (NYSE:KID), Gaming Partners International Corp. (NASDAQ:GPIC), and LeapFrog Enterprises, Inc. (NYSE:LF). This group of stocks are the members of the toys & games industry and their market caps resemble JAKK’s market cap.