“creating the future of play”
MATTEL INC. STOCK ANALYSIS
By Kevin Johnson, Michael Brown, Jasen Laney,
Annick Bendjo
ABOUT MATTEL

Started in 1945 in Southern California by Elliot Handler
and Harold “Matt” Matson

One of the leading toy manufacturers in the world

Brands such as Fisher Price, Hot Wheels, Barbie

Barbie debuted in 1959

Hot Wheels debuted in 1968

Current CEO: Robert A. Eckert
RECOMMENDATION
Recommended to buy because:

Long term investment

Continuous growth

Market share leadership

Positive feedback from analysts

Positive SWOT analysis

Limited business issues
FINANCIAL ANALYSIST
Kevin Johnson
johsonKevin380@gmail.com
NET INCOME

Have not been in the red since 2000

Have made at least $230 million since 2001

Made $684.9 million in 2010 (highest in the last ten years)
(Mattel 2010
Annual Report)
QUICK RATIO
 2008-
1.5
 2009-
2.07
 2010-
2.04
STOCK PRICE & EPS
Stock Price
EPS
2006- $23.65
2006- $1.55
2007- $17.71
2007- $1.56
2008- $16.00
2008- $1.05
2009- $19.98
2009- $1.45
2010- $25.43
2010- $1.88
(Mattel,
2011)
Stock price intra day?
MATTEL VS. HASBRO

Mattel is a larger company

Both have had similar success

Hasbro has a higher EPS for last 4 years
THE CURRENT
COMPETITIVE AND
INDUSTRY CLIMATE
Jasen Laney
Jlaney1@students.towson.edu
COMPETITIVE CLIMATE
Court
Case with MGA Entertainment over rights to the
“Bratz” toy line(*Mattel pays $309m)
Hasbro
Video
game industry
(LexisNexis 2011)
INDUSTRY CLIMATE
Some Industry climate factors are
Rising
distribution costs
Unpredictable
market environment
Manufacturing
(Business Source 2011)
costs
SWOT ANALYSIS
STRENGTHS
•Market Share Leadership
•Strong Brand Equity
•Strong Supply Chain
•Sustainability
•Cost Structure Management
WEAKNESSES
•Bargaining Power
•Packaging Source*
OPPORTUNITIES
•Cost cutting
•Profit from new toys (Cars 2 and
Green Lantern)
•Acquisition of Hit
Entertainment(Thomas The
Train, Bob The Builder)
THREATS
•Manufacturing rates
•Ownership Rights (Bratz
lawsuit)
•Uncertain toy retailing
environment
(Standard and Poor’s 2011)
MATTEL INC. VS. COMPETITORS
Direct Competitor Comparison
MAT
HAS
JAKK
Market Cap:
9.43B
4.67B
497.01M
Employees:
31,000
5,800
828
Qtrly Rev Growth
(yoy):
9.00%
23.10%
7.00%
Revenue (ttm):
6.24B
4.17B
750.92M
Gross Margin (ttm):
49.41%
50.04%
32.74%
EBITDA (ttm):
1.14B
729.36M
77.44M
Operating Margin
(ttm):
15.71%
13.93%
6.63%
Net Income (ttm):
715.15M
370.42M
42.90M
EPS (ttm):
2.02
2.63
1.40
P/E (ttm):
13.59
13.19
13.21
PEG (5 yr expected):
1.00
0.74
0.85
P/S (ttm):
1.55
1.12
0.66
(Yahoo Finance 2011)
CURRENT BUSINESS ISSUES
Michael Brown
Mbrown62@students.towson.edu
PACKAGING SUPPLIES
Sourced packaging supplies produced from Asia
Pulp & Paper
 Clean-cut swaths of Indonesian rainforests
 Threatened
species native
to rainforests

(Greenpeace)
GREENPEACE CAMPAIGN
(Sustainable Manufacturing World)
RESOLUTION

Ordered packaging suppliers to stop buying from Asia Pulp
& Paper

Announced sustainable sourcing principles

Safeguard against buying wood fibers from rainforests

Increase recycled paper

Boost use of Certified wood products
(LA Times)
CHANGE OF LEADERSHIP

Neil Friedman


Resigned from President of Mattel Brands March 2011
Bryan Stockton

Appointed as Chief Operating Officer

Joined Mattel in 2000

Became head of International Division in 2003

Drove division revenue from 36% to 50%
(Zacks)
EXPERT ANALYSTS’ POINT
OF VIEW
Annick Bendjo
abendj1@students.towson.edu
POSITIVE ANALYSIS

Stock Evolution

Market Evolution

Issues Fixed

Growing Opportunities
POSITIVE COMMENTS FROM FINANCIAL
ANALYSTS
Buy or Hold on
 Follow stock evolution on the market.

2011 Stock Evolution
27.69
27.24
23.05
1-Oct-11
1-Sep-11
1-Aug-11
1-Jul-11
1-Jun-11
1-May-11
1-Apr-11
1-Mar-11
1-Feb-11
Closing Value
1-Jan-11
30
25
20
15
10
5
0
Yahoo Finance
STOCK SAFETY GRADED WITH A 2
Consensus Recommendation
Detailed Analyst Recommendation
NASDAQ, Stock Research - Analyst Summary
WHY IS THE OPINION POSITIVE?

Movie related toys have increased Mattel’s revenue

Increase in:

Gross profit

Revenue

Sales volume

Annual dividend

Savings
STOCK VALUE EVOLUTION
Stock Closing Value between 2006 and 2011
30
27.69
25
20
15
13.49
10.75
10
Closing Value
5
10/1/11
5/1/11
12/1/10
7/1/10
2/1/10
9/1/09
4/1/09
11/1/08
6/1/08
1/1/08
8/1/07
3/1/07
10/1/06
5/1/06
0
Yahoo Finance
THE TOY INDUSTRY SECTOR IS DOING
WELL
World Toy Industry Market
$92.000
$90.000
$88.000
$86.000
$84.000
$82.000
$80.000
$78.308
$78.000
$76.000
2006
2007
$89.900
U.S Billion
$80.280
$77.472
2008
2009
2010
2011
Toy Industry Association Inc.
POSSIBLE DIFFICULTIES

Wal-Mart and Target’s low price requirements

Kid’s games’ evolution toward non-standards games.

Low dollar

Competition:

Radica ‘s lost before Sony's PlayStation3,
Microsoft's Xbox 360 or Nintendo's Wii
LOW CONSTRUCTION RISK

Mattel’s construction facilities are located in countries
where

Cheap labor

politically stable

Raw materials are available from numerous
suppliers
POSITIVE EVOLUTION

Good Expectations

International Opportunities

Positive Ranking

Moral Values

Current News
CONCLUSION

Long term investment

Continuous growth

Market share leadership

Positive feedback from analysts

Positive SWOT analysis

Limited business issues
BIBLIOGRAPHY
Hasbro
Inc. (2011). Retrieved October 1, 2011, from MSN
Money:http://moneycentral.msn.com/investor/charts/chartdl.aspx?showchartbt=Redraw+chart
&D4=1&DD=1&D5=0&DCS=2&MA0=0&MA1=0&C5=2&C5D=5&C6=2007&C7=3&C7D=2&C
8=2007&C9=0&CF=0&symbol=HAS&nocookie=1&SZ=0&CP=0&PT=9
Hasbro,
I. (2011). 2010 Annual report. Retrieved October 1, 2011from
Corporateinformation:http://www.shareholder.com/visitors/DynamicDoc/document.cfm?Docum
entID=2935&CompanyID=HAS&zid=4d6301e3
Mattel,
I. (2011). Mattel subsidiaries 2006-2010. Retrieved October 1, 2011, from Financial
History, Annual Reports, and Proxy Statements:
http://investor.shareholder.com/mattel/financials.cfm
Mattel
Inc. (2011). Retrieved October 1, 2011, from Yahoo Finance:
http://finance.yahoo.com/q?s=MAT&ql=0
McGraw-Hill
Company. (2011, 10 3). Standard and Poor's. Retrieved 10 3, 2011, from Mattel,
Inc: http://www.netadvantage.standardandpoors.com.proxytu.researchport.umd.edu/NASApp/NetAdvantage/cp/showHTMLStockReport.do?type=html
Sethi,
S. P., Veral, E. A., Shapiro, H. J., & Emelianova, O. (2010). Mattel, Inc.: Global
Manufacturing. Journal of Business Ethics , 36.
BIBLIOGRAPHY (CONT)
Gottlieb R., Are you selling internationally? Mattel, Jakks and Hasbro show why you
should. July 27, 2011
http://www.globaltoynews.com/.services/blog/6a0133ec87bd6d970b0133ec87bd7e970b/search?fil
ter.q=Mattel+Inc.
 Mattel Inc., 2010 Annual report.
http://files.shareholder.com/downloads/MAT/1408792418x0x455252/1587E36E-D23A-47838AC3-A3ADE3FE9A6F/2010_Mattel_Annual_Report_Bookmarked_.pdf
 Mattel Inc., 2010 Annual report.
http://investor.shareholder.com/mattel/releasedetail.cfm?ReleaseID=615012
 Seidman, O., Stock Screen: Income Stocks with Worthwhile Total Return Potential,
September 26, 2011, retrieved October 21, 2011.
http://www.valueline.com/Stocks/Screens_of_the_Week/Stock_Screen__Income_Stocks_with_W
orthwhile_Total_Return_Potential_-_September_26,_2011.aspx
 Souers, M. (2011,October 1). Stock Report. Standard & Poor's Stock Reports. Retrieved
October 2, 2011, from Standard & Poor’s NetAdvantage database.
http://www.netadvantage.standardandpoors.com/NASApp/NetAdvantage/cp/showStockReport.
do
 Van Kooten, M., Top 25 gaming companies 2010. 03 August 2010
http://www.softwaretop100.org/top-25-gaming-companies-2010
 Yahoo Finance
http://finance.yahoo.com/q/hp?s=MAT&a=00&b=1&c=2011&d=09&e=22&f=2011&g=m
 NASDAQ, Stock Research - Analyst Summary
http://www.nasdaq.com/symbol/mat/analyst-research
