Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 13.1% in the 2.5 months of 2019 (including dividend payments). Conversely, hedge funds’ 15 preferred S&P 500 stocks generated a return of 19.7% during the same period, with 93% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Mattel, Inc. (NASDAQ:MAT).
Mattel, Inc. (NASDAQ:MAT) has experienced a decrease in support from the world’s most elite money managers lately. Our calculations also showed that mat isn’t among the 30 most popular stocks among hedge funds.
At the moment there are dozens of indicators stock market investors employ to grade stocks. A couple of the less utilized indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the market by a superb amount (see the details here).
Let’s go over the fresh hedge fund action encompassing Mattel, Inc. (NASDAQ:MAT).
Hedge fund activity in Mattel, Inc. (NASDAQ:MAT)
At Q4’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in MAT over the last 14 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mason Hawkins’s Southeastern Asset Management has the most valuable position in Mattel, Inc. (NASDAQ:MAT), worth close to $398.1 million, comprising 5.7% of its total 13F portfolio. The second largest stake is held by Ariel Investments, managed by John W. Rogers, which holds a $122.8 million position; 1.7% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions contain Geoffrey Raynor’s Q Investments (Specter Holdings), and Steve Ketchum’s Sound Point Capital.
Due to the fact that Mattel, Inc. (NASDAQ:MAT) has experienced falling interest from the smart money, we can see that there is a sect of money managers that slashed their positions entirely in the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the largest investment of the 700 funds followed by Insider Monkey, valued at close to $5.5 million in stock. Kenneth Tropin’s fund, Graham Capital Management, also dumped its stock, about $3.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Mattel, Inc. (NASDAQ:MAT). These stocks are Emcor Group Inc (NYSE:EME), Ryman Hospitality Properties, Inc. (NYSE:RHP), Penske Automotive Group, Inc. (NYSE:PAG), and American National Insurance Company (NASDAQ:ANAT). This group of stocks’ market caps are closest to MAT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EME | 18 | 194966 | -2 |
| RHP | 18 | 407097 | -6 |
| PAG | 23 | 97186 | 3 |
| ANAT | 15 | 37536 | 2 |
| Average | 18.5 | 184196 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $546 million in MAT’s case. Penske Automotive Group, Inc. (NYSE:PAG) is the most popular stock in this table. On the other hand American National Insurance Company (NASDAQ:ANAT) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Mattel, Inc. (NASDAQ:MAT) is even less popular than ANAT. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on MAT, though not to the same extent, as the stock returned 17.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
