Trade-Ideas LLC identified

Mattel

(

MAT

) as a momo momentum 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 $218.0 million.
  • MAT has a PE ratio of 3.
  • MAT is currently in the upper 30% of its 1-year range.
  • MAT is in the upper 25% of its 20-day range.
  • MAT is in the upper 35% of its 5-day range.
  • MAT is currently trading above yesterday's high.
  • MAT has experienced a gap between today's open and yesterday's close of 0.8%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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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 5.8%. MAT has a PE ratio of 3. Currently there are 5 analysts that rate Mattel a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Mattel has been 6.3 million shares per day over the past 30 days. Mattel has a market cap of $9.0 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.30 and a short float of 20.4% with 8.76 days to cover. Shares are down 12.7% year-to-date as of the close of trading on Tuesday.

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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 good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 128.29% to $18.44 million when compared to the same quarter last year. In addition, MATTEL INC has also vastly surpassed the industry average cash flow growth rate of 13.63%.
  • The gross profit margin for MATTEL INC is rather high; currently it is at 52.34%. 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 12.48% compares favorably to the industry average.
  • MAT, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 11.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MATTEL INC's earnings per share declined by 31.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MATTEL INC reported lower earnings of $1.46 versus $2.60 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings ($1.26 versus $1.46).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Leisure Equipment & Products industry average. The net income has significantly decreased by 32.6% when compared to the same quarter one year ago, falling from $331.84 million to $223.78 million.

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