Mattel, Inc. (NASDAQ:MAT) has experienced an increase in hedge fund sentiment in recent months. This is important to note because the company’s profit margins improved by 320 basis points in its latest quarterly financials, with earnings per share hitting the 11-cent mark, beating consensus by 2 cents a share.
If you’d ask most stock holders, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the bigwigs of this club, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of the hedge fund industry’s total capital, and by tracking their highest performing stock picks, we have figured out a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as integral, positive insider trading sentiment is a second way to parse down the marketplace. Just as you’d expect, there are lots of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if investors know where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the recent action encompassing Mattel, Inc. (NASDAQ:MAT).
What have hedge funds been doing with Mattel, Inc. (NASDAQ:MAT)?
At year’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of 16% from the third quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Mattel, Inc. (NASDAQ:MAT), worth close to $50.9 million, comprising 0.1% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $27.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, David Harding’s Winton Capital Management and Cliff Asness’s AQR Capital Management.
Consequently, some big names have jumped into Mattel, Inc. (NASDAQ:MAT) headfirst. Bailard Inc, managed by Thomas Bailard, established the largest position in Mattel, Inc. (NASDAQ:MAT). Bailard Inc had 2.5 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $1 million position during the quarter. The other funds with brand new MAT positions are Robert B. Gillam’s McKinley Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading Mattel, Inc. (NASDAQ:MAT)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the last six-month time frame, Mattel, Inc. (NASDAQ:MAT) has seen zero unique insiders buying, and 15 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Mattel, Inc. (NASDAQ:MAT). These stocks are Kid Brands Inc (NYSE:KID), Gaming Partners International Corp. (NASDAQ:GPIC), JAKKS Pacific, Inc. (NASDAQ:JAKK), LeapFrog Enterprises, Inc. (NYSE:LF), and Hasbro, Inc. (NASDAQ:HAS). This group of stocks are in the toys & games industry and their market caps are similar to MAT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Kid Brands Inc (NYSE:KID)||7||3||0|
|Gaming Partners International Corp. (NASDAQ:GPIC)||2||0||1|
|JAKKS Pacific, Inc. (NASDAQ:JAKK)||11||0||0|
|LeapFrog Enterprises, Inc. (NYSE:LF)||14||5||0|
|Hasbro, Inc. (NASDAQ:HAS)||15||0||7|
With the results shown by our research, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Mattel, Inc. (NASDAQ:MAT) applies perfectly to this mantra.