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Insider Buys into Collectibles Leader with New Leadership, Growth Verticals

by | Dec 22, 2021

Funko (FNKO) with a large, rare open market buy on 12/16 from a director who bought 99,300 shares at $17.25, a more than $1.7M investment. This is the first open market buy since November 2019 when a director bought $500K in stock at $13.84. FNKO shares rocketed higher in early 2021 before pulling back and settling around the 50% retracement of the move. FNKO is still up over 70% on the year and near a break out of a narrow, weekly bull wedge that has room to $25. The $937M company trades 13X earnings, 1X sales, and 9X FCF. FNKO has a new CEO incoming who is looking to expand the company into new and inventive areas like Popsies – a 3D greeting card alternative – and NFTs. The company also should benefit into year-end from the big success of the new Spiderman movie as they recently added a number of new figures to their exclusive deal with Walmart.  Analysts have an average target for shares of $25 and Street High $34. Jefferies upgrading to Buy in late August with a $25 PT. The firm has grown increasingly confident in the company’s 10%-plus medium term growth profile and its business trajectory after attending the 2021 Virtual Licensing Expo event. The firm sees a favorable backdrop as store traffic returns and Funko’s model is de-risked by property, category and geographic concentration. Figures remain the most popular expression for Funko fans, but additional categories continue to co-grow. Covid provided space for fans to dig deeper into back stories, lore, and to unearth second and third level characters which has reinforced the breadth of the company’s approach and reinforced its tight lock on licensing partnerships. Hedge fund ownership fell 2% last quarter. Hood River Capital a buyer of 875K shares and Woodson Capital adding 665K shares. Short interest is 9.35%.

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