Today's Water-Logged And Getting Wetter Stock: Mattel (MAT)

Trade-Ideas LLC identified Mattel (MAT) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Mattel

(

MAT

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Mattel as such a stock due to the following factors:

  • MAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.5 million.
  • MAT has traded 3.5 million shares today.
  • MAT traded in a range 232.5% of the normal price range with a price range of $1.46.
  • MAT traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on MAT:

Mattel, Inc. designs, manufactures, and markets a range of toy products worldwide. The company operates in three segments: North America, International, and American Girl. The stock currently has a dividend yield of 4.7%. MAT has a PE ratio of 31. Currently there are 7 analysts that rate Mattel a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Mattel has been 3.2 million shares per day over the past 30 days. Mattel has a market cap of $11.0 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 0.94 and a short float of 13.7% with 9.74 days to cover. Shares are up 20.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mattel as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for MATTEL INC is rather high; currently it is at 51.61%. Regardless of MAT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MAT's net profit margin of -8.39% significantly underperformed when compared to the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Leisure Equipment & Products industry and the overall market on the basis of return on equity, MATTEL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$89.25 million or 68.05% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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