Time to Play Mattel - Barron's

| About: Mattel, Inc. (MAT)
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The holiday season is practically synonymous with toys, and Barron's says this year investors may want to consider making a play for Mattel. As shares of the toymaker trade around a 52-week low after a series of product recalls over the summer that damaged the company's reputation, followers of the stock say, at this point, there's very little, if any, downside risk. Meanwhile, the company has taken steps to restore its image such as launching a Web site to help parents track tainted toys and testing nearly all the toys it plans to ship for the holidays; one PR expert says the company has avoided major consumer defections. Bulls say the stock could jump from its current $21 to $30 over the next year as cash flow and earnings may rise 20% and 11%, respectively. Skeptics, on the other hand, say the broadening appeal of video games to younger kids is taking a toll on traditional toys such as Mattel's Barbie. The biggest risk, it's agreed, is the possibility of still more recalls.

Sources: Barron's
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Earnings call transcript: Mattel Q3 2007

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