Longleaf Partners, managed by Southeastern Asset Management, released its first-quarter 2026 investor letter. A copy of the letter is available to download here. The Fund returned -4.46% in the quarter, compared to the S&P 500’s -4.33% and the Russell 1000 Value Index’s 2.10% return. The year began similarly to the second half of 2025, with rising stocks and penalization for caution. February was marked by unusual sector-wide movements influenced by perceived AI outcomes. Complications arose from the Iran War and increasing private credit risks. The Fund initially lagged the market, but performance improved as conditions worsened. The fund ended the quarter with a P/V of mid-50s%, which bodes well for promising future returns. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Longleaf Partners Fund highlighted stocks like Mattel, Inc. (NASDAQ:MAT). Mattel, Inc. (NASDAQ:MAT) is a multinational toy and entertainment company specializes in manufactures and markets toys, games, and other products. On May 15, 2026, Mattel, Inc. (NASDAQ:MAT) closed at $15.15 per share. One-month return of Mattel, Inc. (NASDAQ:MAT) was 1.61%, and its shares lost 24.25% over the past 52 weeks. Mattel, Inc. (NASDAQ:MAT) has a market capitalization of $4.40 billion.
Longleaf Partners Fund stated the following regarding Mattel, Inc. (NASDAQ:MAT) in its Q1 2026 investor letter:
“Mattel, Inc. (NASDAQ:MAT) – Children’s toy, media, and consumer products creator Mattel was a detractor in the quarter. The stock fell due to an unexpected $150 million (15% of EBITDA) in incremental spending on initiatives including mobile gaming, Brick Shop (Mattel’s competitor to LEGO), and direct to consumer marketing. CEO Ynon Kreiz cited a one year payback on this spend, but the market remains in show-me mode and the price declined proportionate to the 2026 earnings per share guidance reduction. This was compounded by 4Q results that missed expectations, especially in the US. To the positive, the company committed to $1.5 billion in share repurchase over the next 3 years, which equates to 33% of shares outstanding at today’s price. 2026 should have demonstrated the true FCF power of Mattel given traction on IP initiatives including two new movies (Masters of the Universe and Matchbox), two new mobile game launches, and licensing momentum with Toy Story 5 and KPop Demon Hunters. Unfortunately, this was delayed, and we are focused on what we can do to improve this situation.”
Mattel, Inc. (NASDAQ:MAT) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 36 hedge fund portfolios held Mattel, Inc. (NASDAQ:MAT) at the end of the fourth quarter, up from 34 in the previous quarter. While we acknowledge the risk and potential of Mattel, Inc. (NASDAQ:MAT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Mattel, Inc. (NASDAQ:MAT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Mattel, Inc. (NASDAQ:MAT) and shared the list of best M&A target stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
