Kraft Foods, Starbucks, Jakks Pacific, Microsoft Corp and Freda?s Inc.

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Kraft Foods Inc. (NYSE: [ KFT ]), Starbucks Corporation (Nasdaq: [ SBUX ]), Jakks Pacific Inc. (Nasdaq: [ JAKK ]), Microsoft Corp. (Nasdaq: [ MSFT ]) and Freda�sInc. (Nasdaq: [ FRED ]).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=4579 ]

Here are highlights from Tuesdaya�s Analyst Blog:

A Kraft, Starbucks Rift After 12 Years

Kraft Foods Inc. (NYSE: [ KFT ]) is claiming arbitration from Starbucks Corporation (Nasdaq: [ SBUX ]), as Starbucks attempts to end the 12-year agreement, under which Kraft Foods has been distributing packaged Starbucks coffee to retail grocery stores.

Kraft stated that the deal was in effect indefinitely and it requires sufficient time to execute an orderly transition. Kraft insists that Starbucks must compensate it for the fair market value of the business with a premium of up to 35% of that value.

Marc Firestone, Executive Vice President, Corporate and Legal Affairs and General Counsel, said that Starbucks is trying to walk away from a long-term strategic partnership -- from which it has greatly benefited -- without abiding by contractual conditions.

On the other hand, Starbucks stated that it decided to end the contract with Kraft, as Kraft did not actively protect and promote the Starbucks Coffee and Seattlea�s Best Coffee brands. It further stated that as per the agreement, Kraft was required to closely work with Starbucks to maintain its involvement in making important marketing decisions and customer contracts.

The contract between Kraft and Starbucks started back when the retail grocery coffee business of Starbucks was generating less than $50 million in annual revenues. Kraft, through its expertise and resources, has grown it to approximately a $500 million business.

There are predictions among various analysts that Starbucks will enter into new partnerships, especially in the single-cup coffee market.

Jakks Pacific and Microsoft Team Up

Jakks Pacific Inc. (Nasdaq: [ JAKK ]) recently inked a licensing agreement with Microsoft Corp. (Nasdaq: [ MSFT ]) to design and manufacture interactive plush toys beginning with King Cheetah and Maltese Tiger that integrate with the aKinectimalsa� video game for Kinect for Xbox 360 entertainment system that was launched worldwide this month. Jakks Pacific has a partnership with Kinect games to manufacture the interactive toy range, which falls under the pre-school category.

In addition, Jakks will produce a mainline plush assortment to be available at retail counters in the U.S. starting in spring 2011. The first slot is slated to feature five plush animals.

Jakks limited collectora�s edition of Kinectimals plush toys will deploy the Microsoft Tag technology, allowing players to scan the tag on their toys and watch the King Cheetah or Maltese Tiger appear in the game.

We expect the company to benefit from this new initiative in 2011. Additionally, many of the companya�s launches in 2010 and early 2011 look much better than products of previous years.

The companya�s range of new toys and electronics provide solid momentum to its 2010 holiday season. Toys aRa Us recently listed its Disney Princess & Me 18-inch dolls as one of the Top 15 best new toys of the holiday season.

Jakks Pacific currently retains the Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.

Freda�s Posts Healthy Sales

Freda�sInc. (Nasdaq: [ FRED ]), a leading discount general merchandise store operator in the United States, recently posted healthy sales results for the four-week period ended November 27, 2010.

After registering a growth of 1.2% in October 2010, Freda�s experienced comparable store sales growth of 4.7% in November. For the third quarter of 2010, comps climbed 1.5%. Increased store traffic and sound merchandise positively impacted the comparable store sales during the reported month and the quarter.

The company witnessed increased comparable store sales in all the four weeks compared to a decline of 3.3% in the prior-year period. Management stated that with excellent merchandising and marketing strategy in place, Freda�s has created exciting shopping experiences for its customers. Moreover, the company has a strong balance sheet with a strong cash position, quality inventory and no outstanding debt.

Net sales for November jumped 4.0% to $1.506 billion from $1.453 billion in the same month last year. In the third quarter, sales climbed 3.0% to $435 million from $422.4 million posted in the same period last year.

The strong third quarter has made Freda�s more confident. The company expects total earnings per diluted share for 2010 to be in the range of 74 cents to 78 cents, representing an increase of 25% to 32% over last year. This was further backed by solid comparable store sales in November.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=5514 ].

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: [ http://at.zacks.com/?id=5516 ]

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4580 ].

Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.

Join us on Facebook: [ http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts ]

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

N@N

Kraft Foods, Starbucks, Jakks Pacific, Microsoft Corp and Freda?s Inc.