Sold MAT @ 18%loss. I asked myself: Would I buy this if I didn't already own it and came up with NO after reading reports from Merrill and SSB
SSB sums it: "While a turnaround at Mattel cannot be discounted, a depleted management team, an undefined strategy, limited earnings visibility, a difficult road ahead for TLC, and fluctuating international markets all pose major CHALLENGES for the company"
The value in Mattel depends greatly on who they get, not just as CEO, but CEO, COO, International manager as well as success of new COO for TLC. When Bob Olstein bailed at 12 after riding it from 20's I shoulda gotta clue - there was big ugliness coming.
My thinking is that as bad news and uncertainty continue to come out there are going to 'buying opportunities' at significantly lower levels - I can see 7 or 8 within the next 6 months. SSB is taking estimates to .50-.60 for 2000 and commented that MAT has traded as low as 9x earnings in tough times. On this board, we've talked about a lot of stuff selling well below that. Mat has some great brands, but this isn't a market that values brands and since toy brands have to continue to be reinvented [Kids outgrow, new kids must be sold on brand], management is critical.
I may jump back in as new info and/or lower prices alter the risk return to more favorable levels, but it doesn't look like a hold for now.
Be well,
bob |
