Why Mattel Shares Popped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of toy giant Mattel (NYS: MAT) climbed 10% on Tuesday after its quarterly results easily topped Wall Street expectations.

So what: Analysts had actually expected earnings to decline in the seasonally slow period, making Mattel's 20% profit increase -- net income of $96.2 million versus $80.5 million a year-ago -- all the more encouraging. Management cited healthy demand for brands including Barbie, American Girl, and Monster High, as well as lower operating expenses, for the strong results, giving investors plenty of optimism over its growth going forward.

Now what: Given the operating momentum Mattel takes into the second half of the year, which includes the crucial holiday season, I'd say the shares have plenty of more room to run. "As we look forward, we remain focused on executing our portfolio of strong brands, countries and customers to deliver in the all-important holiday season," said CEO Bryan Stockton. With the stock still sporting a juicy dividend yield of nearly 4% and trading at a forward P/E of 12, buying into the bullishness seems like a reasonable move.

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The article Why Mattel Shares Popped originally appeared on Fool.com.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Mattel. Motley Fool newsletter services have recommended creating a bear put spread position in Mattel. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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