Hedge Funds Are Dumping Mattel, Inc. (MAT)

Does Mattel, Inc. (NASDAQ:MAT) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Mattel, Inc. (NASDAQ:MAT) has experienced a decrease in hedge fund interest of late. MAT was in 29 hedge funds’ portfolios at the end of September. There were 34 hedge funds in our database with MAT holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), and Pearson PLC (ADR) (NYSE:PSO) to gather more data points.

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Keeping this in mind, let’s go over the fresh action regarding Mattel, Inc. (NASDAQ:MAT).

What does the smart money think about Mattel, Inc. (NASDAQ:MAT)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 15% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ariel Investments, managed by John W. Rogers, holds the biggest position in Mattel, Inc. (NASDAQ:MAT). According to its latest 13F filing, Ariel Investments has a $114.3 million position in the stock, comprising 1.4% of its 13F portfolio. The second most bullish fund manager is Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, which holds a $76.1 million position; 1.7% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions include Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management and Principal Global Investors’s Columbus Circle Investors.

Because Mattel, Inc. (NASDAQ:MAT) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds that decided to sell off their full holdings in the third quarter. It’s worth mentioning that Joel Greenblatt’s Gotham Asset Management said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, valued at about $14.9 million in call options. Ken Griffin’s fund, Citadel Investment Group, also sold off its call options, worth about $6.8 million. These moves are important to note, as total hedge fund interest fell by 5 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Mattel, Inc. (NASDAQ:MAT). We will take a look at NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Pearson PLC (ADR) (NYSE:PSO), and Citizens Financial Group Inc (NYSE:CFG). All of these stocks’ market caps are similar to MAT’s market cap.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $498 million. That figure was $534 million in MAT’s case. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table. On the other hand Pearson PLC (ADR) (NYSE:PSO) is the least popular one with only 6 bullish hedge fund positions. Mattel, Inc. (NASDAQ:MAT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CFG might be a better candidate to consider a long position.

Disclosure: none.