The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Mattel, Inc. (NASDAQ:MAT).
Mattel, Inc. (NASDAQ:MAT) shareholders have witnessed an increase in hedge fund interest in recent months. MAT was in 21 hedge funds’ portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with MAT holdings at the end of the previous quarter. Our calculations also showed that mat isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s take a look at the recent hedge fund action surrounding Mattel, Inc. (NASDAQ:MAT).
How have hedgies been trading Mattel, Inc. (NASDAQ:MAT)?
At Q1’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in MAT a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Mattel, Inc. (NASDAQ:MAT) was held by Southeastern Asset Management, which reported holding $465.9 million worth of stock at the end of March. It was followed by Ariel Investments with a $148 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and Millennium Management.
As aggregate interest increased, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, initiated the biggest position in Mattel, Inc. (NASDAQ:MAT). Renaissance Technologies had $23.6 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $6 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Talpins’s Element Capital Management, Anand Parekh’s Alyeska Investment Group, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Mattel, Inc. (NASDAQ:MAT) but similarly valued. These stocks are Viper Energy Partners LP (NASDAQ:VNOM), United Microelectronics Corp (NYSE:UMC), First Industrial Realty Trust, Inc. (NYSE:FR), and Haemonetics Corporation (NYSE:HAE). All of these stocks’ market caps match MAT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNOM | 17 | 190764 | 7 |
| UMC | 15 | 86705 | -2 |
| FR | 11 | 303801 | -7 |
| HAE | 24 | 648117 | 4 |
| Average | 16.75 | 307347 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $704 million in MAT’s case. Haemonetics Corporation (NYSE:HAE) is the most popular stock in this table. On the other hand First Industrial Realty Trust, Inc. (NYSE:FR) is the least popular one with only 11 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately MAT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MAT were disappointed as the stock returned -18.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
