Is Mattel, Inc. (MAT) A Good Stock To Buy?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Mattel, Inc. (NASDAQ:MAT) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Mattel, Inc. (NASDAQ:MAT) was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. MAT has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 23 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 FMC Technologies, Inc. (NYSE:FTI), Splunk Inc (NASDAQ:SPLK), and Pinnacle West Capital Corporation (NYSE:PNW) to gather more data points.

In today’s marketplace there are a multitude of methods stock traders put to use to analyze publicly traded companies. Some of the best methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a healthy margin (see the details here).

With all of this in mind, we’re going to analyze the key action surrounding Mattel, Inc. (NASDAQ:MAT).

What have hedge funds been doing with Mattel, Inc. (NASDAQ:MAT)?

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, JANA Partners, managed by Barry Rosenstein, holds the number one position in Mattel, Inc. (NASDAQ:MAT). JANA Partners has a $196.1 million position in the stock, comprising 2.2% of its 13F portfolio. Coming in second is Andrew Feldstein and Stephen Siderow of Blue Mountain Capital, with a $52.9 million position; the fund has 1% of its 13F portfolio invested in the stock. Other peers that hold long positions contain Tom Gayner’s Markel Gayner Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Alec Litowitz and Ross Laser’s Magnetar Capital.

Judging by the fact that Mattel, Inc. (NASDAQ:MAT) has experienced declining sentiment from hedge fund managers, logic holds that there exists a select few funds that decided to sell off their positions entirely by the end of the third quarter. Interestingly, Joel Greenblatt’s Gotham Asset Management said goodbye to the largest investment of the 700 funds monitored by Insider Monkey, valued at an estimated $29.6 million in stock. Jim Simons’s fund, Renaissance Technologies, also dumped its stock, about $19.5 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Mattel, Inc. (NASDAQ:MAT). We will take a look at FMC Technologies, Inc. (NYSE:FTI), Splunk Inc (NASDAQ:SPLK), Pinnacle West Capital Corporation (NYSE:PNW), and Aramark (NYSE:ARMK). All of these stocks’ market caps resemble MAT’s market cap.

As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,182 million. That figure was $456 million in MAT’s case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand Pinnacle West Capital Corporation (NYSE:PNW) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Mattel, Inc. (NASDAQ:MAT) is even less popular than PNW. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.