Mattel, Inc. (MAT): Longleaf Partners Fund Sees a Bright Future

In a recently published Longleaf Partners Fund’s Q1 2019 Investor Letter, the fund posted short comments on several companies in its portfolio, including Mattel, Inc. (NASDAQ:MAT). If you are interested you can track down a copy of the letter here, while in this article we bring you the part of the letter that discusses only Mattel’s stock.

Contributors/Detractors(Q1Investment return; Q1 Fund contribution)

Mattel (30%,1.93%), the toy and media company, was another large contributor. During the last quarter, Barbie and Hot Wheels grew nicely once again. Mattel’s new media division demonstrated some of the possibilities for monetizing the company’s brands, announcing Barbie and Hot Wheels movie joint ventures with Warner Brothers, an American Girl movie with MGM, and 22 television shows to distribute across multiple platforms. The company’s earnings power should grow with a targeted 15% operating income margin over the next few years, following additional cost cuts, international inventory rationalization and longer-term investments during 2019. Management is focused on maximizing the value of the Barbie and Hot Wheels brands, while returning Fisher-Price, American Girl and Thomas to growth. Not only is the stock well below our current appraisal, but we expect that appraisal to grow rapidly over the next few years. CEO Ynon Kreiz personally bought $1 million of shares in the last few months.

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Copyright: auremar / 123RF Stock Photo

Mattel, Inc. is a renowned toy manufacturer that was founded back in 1945 and is headquartered in El Segundo, California. Since the beginning of the year, Mattel’s stock gained 25.81%, having a closing price of $12.28 on April 25th. Its market cap is of $4.24 billion.

At the end of the fourth quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in MAT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Southeastern Asset Management held the most valuable stake in Mattel, Inc. (NASDAQ:MAT), which was worth $398.1 million at the end of the third quarter. On the second spot was Ariel Investments which amassed $122.8 million worth of shares. Moreover, Q Investments (Specter Holdings), Citadel Investment Group, and Sound Point Capital were also bullish on Mattel, Inc. (NASDAQ:MAT), allocating a large percentage of their portfolios to this stock.


Disclosure: None.

This article is originally published at Insider Monkey.