Just like a jack-in-the-box, I believe that toymaker JAKKS Pacific (NASDAQ:JAKK) is getting ready to spring upward. Earlier this summer, fellow Fool Rick Munarriz suggested that JAKKS is downright cheap. I'd have to agree, and I think a portfolio filled with shares of JAKKS could make a sweet Christmas present.

The company reported record third-quarter earnings of $1.05 per share, with net income increasing 41% year over year. For the first nine months of 2005, JAKKS earned $1.77 per share, a 65% earnings increase from the year-ago period. Net income benefited from improved operating efficiencies, mainly due to well-controlled costs and lower selling, general, and administrative expenses. In fact, JAKKS has been able to produce year-over-year revenue growth in each of the last eight quarters. The company also reaffirmed full-year guidance of $2.28 per share on $660 million in revenues, doubling the revenues generated in 2003.

However, some analysts believe that JAKKS will most likely miss full-year estimates, and they remain cautious for 2006, citing difficulties with new products replacing existing revenues. Although I disagree with this analysis, the more than 30% of shareholders with short positions might be celebrating if the company misses its projected revenues and product growth.

In its favor, JAKKS has a diverse line of well-performing toys. The hottest is the Fly Wheels brand, which enjoyed a successful launch as one of the summer's hottest toys. The toy vehicles, which can race at more than 300 scale miles per hour and soar more than 25 feet in the air, most recently made Toy Wishes magazine's coveted "Hot Dozen" list. (I'd suggest that parents whose kids get Fly Wheels for Christmas encourage them to play outside.)

JAKKS also continues to be the leader in plug-and-play electronic "TV Games." It recently announced licensing agreements with Motley Fool Stock Advisor pick DreamWorksAnimation (NYSE:DWA) for new games in 2006. In addition, JAKKS announced agreements with Scholastic (NASDAQ:SCHL) to market Tell-A-Story interactive books based on the popular Clifford The Big Red Dog and I Spy books. These new products' success could further boost JAKKS' revenues.

With JAKKS trading at an attractively low P/E around 9, and consistently delivering popular new products, I wouldn't be surprised if the company's share price were to finally pop right out of its box.

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Fool contributor M.D. Mitchell is down the street at the local junkyard looking for some good trash. He lives for the winding part, just before Jack finally pops. He holds no financial position in any companies mentioned above.