Hi guys, FWIW the "newer version of Mike" (hence the 2.0 part) at least is now looking for growth, and has found it with stocks like ADI and EXDS...rather than slogging thru "value" propositions like "net-nets" (Net-net defined: imagine a company is a bucket of sh*t. Imagine that company being valued at the price of just the bucket, and you have a net-net!). MAT is a holdover from my "value" investing daze. It is a tough row to hoe: imagine so many people doing what they thought was the "safe thing" and buying companies they thought they knew...Mattel toys, Singer sewing machines, Fruit of the Loom underwear, Dave and Busters restaurants...all pitched by "value" analysts when they were at or near $20 once upon a time!
The way MAT is trading suggests the market is bracing for MAT to miss their number on their "Super Bowl" quarter, a perception directly attributable to the fact that Jill is still in charge, plus that she will stay in charge. Who is willing to bet she will not drive the ship into the rocks yet again?
I see a few possibilities here, in conjunction with your "catalyst" comments...
MAT reports on Feb.8 they blow the quarter, maybe blame it on TLC, or distractions of TLC, wherever Jill chooses to point the finger of blame, in the form of a pithy ego-protecting direct quote. Most importantly, there is no indication that Barad is going anywhere. Call that my seeyuh at 7 scenario.
Same as above, except the PR includes her resignation. We all say our halleuyahs and we are up a few points in a heartbeat.
MAT hits their number, perhaps even exceeds the number, but Jill stays put. There will be a sell the news oppty, but the stock only maintains a modest increase in stock price, say 13. This scenario concerns me because it guarantees Jill a whole lot of time. Like a broken clock that is still correct twice a day, all this means is even Jill can't screw up the core sound business of Mattel. The market will not reward MAT much for one good quarter.
Same as above, but Jill announces she will leave, presumably on an ego-protecting high note. Best scenario of all.
However, given Jill's longevity so far is starting to rival that of Saddam, I am fearful that she may end up sticking around for a mighty long time. Given Jill's apparent disposition and partial BOD, would she willingly step down in any scenario? Or will we have to wait for a proxy battle to get some responsive new board members?
Waiting for that "catalyst" may be a long dragged-out proposition while there are better investments out there now.
Mike |
