Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Mattel, Inc. (NASDAQ:MAT) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Mattel, Inc. (NASDAQ:MAT) investors should pay attention to an increase in support from the world’s most elite money managers recently. Mattel, Inc. (NASDAQ:MAT) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. There were 25 hedge funds in our database with MAT positions at the end of the second quarter. Our calculations also showed that MAT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Rogers of Ariel Investments
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to view the key hedge fund action surrounding Mattel, Inc. (NASDAQ:MAT).
Do Hedge Funds Think MAT Is A Good Stock To Buy Now?
At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 36% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MAT over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Mattel, Inc. (NASDAQ:MAT) was held by Southeastern Asset Management, which reported holding $340.6 million worth of stock at the end of September. It was followed by Ariel Investments with a $308.7 million position. Other investors bullish on the company included Citadel Investment Group, Balyasny Asset Management, and Brahman Capital. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to Mattel, Inc. (NASDAQ:MAT), around 6.46% of its 13F portfolio. Brahman Capital is also relatively very bullish on the stock, dishing out 3.71 percent of its 13F equity portfolio to MAT.
Consequently, some big names have jumped into Mattel, Inc. (NASDAQ:MAT) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in Mattel, Inc. (NASDAQ:MAT). Balyasny Asset Management had $66.3 million invested in the company at the end of the quarter. Mitch Kuflik and Rob Sobel’s Brahman Capital also made a $50.7 million investment in the stock during the quarter. The other funds with brand new MAT positions are Alexander Mitchell’s Scopus Asset Management, Alexander Mitchell’s Scopus Asset Management, and Anand Parekh’s Alyeska Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Mattel, Inc. (NASDAQ:MAT) but similarly valued. These stocks are TaskUs Inc. (NASDAQ:TASK), Omnicell, Inc. (NASDAQ:OMCL), ChargePoint Holdings, Inc. (NYSE:CHPT), Bumble Inc. (NASDAQ:BMBL), Core & Main Inc. (NYSE:CNM), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), and Synovus Financial Corp. (NYSE:SNV). This group of stocks’ market values resemble MAT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TASK | 18 | 230676 | 18 |
| OMCL | 20 | 110091 | 2 |
| CHPT | 18 | 97964 | 1 |
| BMBL | 35 | 608650 | 12 |
| CNM | 12 | 276636 | 12 |
| AVAL | 8 | 12870 | 4 |
| SNV | 29 | 235408 | -1 |
| Average | 20 | 224614 | 6.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $225 million. That figure was $1031 million in MAT’s case. Bumble Inc. (NASDAQ:BMBL) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 8 bullish hedge fund positions. Mattel, Inc. (NASDAQ:MAT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MAT is 85.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on MAT as the stock returned 12.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
