Should You Avoid Mattel, Inc. (MAT)?

Mattel, Inc. (NASDAQ:MAT) has seen a decrease in hedge fund sentiment of late.

In today’s marketplace, there are tons of methods market participants can use to monitor their holdings. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the market by a significant margin (see just how much).

Just as beneficial, bullish insider trading sentiment is a second way to parse down the marketplace. There are a number of motivations for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).

Now, we’re going to take a gander at the key action encompassing Mattel, Inc. (NASDAQ:MAT).

How are hedge funds trading Mattel, Inc. (NASDAQ:MAT)?

At the end of the first quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in Mattel, Inc. (NASDAQ:MAT), worth close to $77.2 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $75.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include David Harding’s Winton Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Cliff Asness’s AQR Capital Management.

Since Mattel, Inc. (NASDAQ:MAT) has witnessed a declination in interest from the smart money, logic holds that there were a few money managers that decided to sell off their entire stakes in Q1. Interestingly, Malcolm Fairbairn’s Ascend Capital said goodbye to the largest position of the “upper crust” of funds we key on, comprising an estimated $8.8 million in stock.. Chuck Royce’s fund, Royce & Associates, also dropped its stock, about $3.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Mattel, Inc. (NASDAQ:MAT)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the last six-month time period, Mattel, Inc. (NASDAQ:MAT) has seen zero unique insiders purchasing, and 13 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Mattel, Inc. (NASDAQ:MAT). These stocks are Kid Brands Inc (NYSE:KID), JAKKS Pacific, Inc. (NASDAQ:JAKK), LeapFrog Enterprises, Inc. (NYSE:LF), and Hasbro, Inc. (NASDAQ:HAS). All of these stocks are in the toys & games industry and their market caps are similar to MAT’s market cap.

With the returns shown by our tactics, retail investors must always monitor hedge fund and insider trading activity, and Mattel, Inc. (NASDAQ:MAT) applies perfectly to this mantra.

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