Let's talk some numbers on MAT
Market Cap of combined entity TLC-MAT ($24/share, 436M shares) is $10.5B.
Pro Forma earned 0.04/share in 1996, lost 51 cents/share in 1997, and made 36 cents/share in 1998.
Long Term Debts of $1.4B, for a LTD/equity of ~0.67.
In the best year of the last three, TLC-MAT earned less than 8% on equity.
I'm sure there'll be efficiencies squeezed out of this. I still maintain that the TLC acq is more a move MAT was forced into than one it proactively sought. And there are neat franchises within the combined entity. But getting past the feel-good "Barbie is fine" mantra and getting to the numbers, MAT has a lot of proving yet to do, and a decent amount of debt to whittle down.
I'll be the first to admit that there's much more to these numbers than meet the eye, but still, other than the franchise, does it really look like a Buffett-like stock? I still do like it, and am optimistic that the stock will jump at the first hint of realized synergies here. But it's not all downhill, and there remains some degree of risk, IMO.
Mike |
