An Investor Shorts Mattel and the Hedge Fund Industry is Underweight; Should You Follow Them?

Thus, it is no surprise that BlueMountain’s projection of Mattel’s revenue for 2016 stands at $5.1 billion as opposed to a $5.6 billion consensus, while the EBIT projection stands at $400 million as compared to $710 million consensus estimate. The fund is also skeptical of the effectiveness of the restructuring measures that Mattel is currently undergoing, which also mark a fourth time that such cost cutting measures have been deemed necessary by the management since 2008. Zorub is also of the opinion that investors should not be fooled by the appointment of the ‘new’ CEO as he doesn’t exactly offer a fresh perspective since he has been on the Board since 1996.

Moreover, hedge funds from our database are generally underweight Mattel, Inc. (NASDAQ:MAT), as a total of 23 funds had total holdings worth $270.48 million at the end of June, representing 3.1% of the company’s market cap. This doesn’t compare well with the 26 funds with an aggregate investment worth $371.89 million at the end of March. Joel Greenblatt‘s Gotham Asset Management and Jim Simons‘ Renaissance Technologies reduced their respective stakes in Mattel by 47% to 1.15 million shares and by 72% to 760,600 shares during the second trimester.

Disclosure: None