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Monness, Crespi, Hardt & Co. Has Upgraded Mattel to a ‘Buy’

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Price movements

Mattel (MAT) has a market cap of $10.8 billion. It rose 1.6% to close at $31.74 per share on September 19, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.63%, -3.8%, and 21.2%, respectively, on the same day.

MAT is trading 3.1% below its 20-day moving average, 3.2% below its 50-day moving average, and 4.1% above its 200-day moving average.

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Related ETFs and peers

The ALPS Sector Dividend Dogs ETF (SDOG) invests 2.2% of its holdings in Mattel. The ETF tracks an equal-weighted index of the five highest-yielding S&P 500 securities in each sector. The YTD price movement of SDOG was 17.6% on September 19.

By comparison, the WisdomTree Dividend Ex-Financials ETF (DTN) invests 2.0% of its holdings in Mattel. The ETF tracks an index selected and weighted by dividends that exclude financial companies.

The market caps of Mattel’s competitors are as follows:

  • Walt Disney Company (DIS) — $148.8 billion
  • Hasbro (HAS) — $9.8 billion

Mattel’s rating

Monness, Crespi, Hardt & Co. has upgraded Mattel’s rating to a “buy” from a “neutral,” setting the stock’s price target at $37.0 per share.

Performance of Mattel in 2Q16

Mattel reported 2Q16 net sales of $957.3 million, a fall of 3.1% from its net sales of $988.2 million in 2Q15. Gross sales of the Mattel Girls & Boys and American Girl brands fell 8.0% and 19.1%, respectively.

Gross sales of the Fisher-Price and Construction and Arts & Crafts brands rose 2.8% and 11.6%, respectively, between 2Q15 and 2Q16. The company’s gross profit margin fell 5.4%.

Mattel’s net income and EPS (earnings per share) fell to -$19.1 million and -$0.06, respectively, in 2Q16, compared to -$11.4 million and -$0.03, respectively, in 2Q15. It reported adjusted EPS of -$0.02 in 2Q16, compared to $0.01 in 2Q15.

Mattel’s cash and cash equivalents and inventories rose 5.8% and 4.5%, respectively, between 2Q15 and 2Q16. Its current ratio and long-term debt-to-equity ratio fell to 1.7x and 0.77x, respectively, in 2Q16, compared to 2.6x and 0.81x, respectively, in 2Q15.

Now, let’s discuss Trinseo (TSE).

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