We recently compiled a list of the 10 Best Kid-Friendly Stocks To Buy Right Now. In this article, we are going to take a look at where Mattel, Inc. (NASDAQ:MAT) stands against the other kid-friendly stocks.
Expert Thinks Value Stocks are Making a Comeback
Investors and analysts alike are concerned about where equities are headed in 2025. On December 23, Eric Beyrich, Sound Income Strategies co-chief investment officer appeared in an interview on Yahoo Finance to share his market thesis for equities in 2025.
Beyrich shared his perspective on the market, emphasizing a possible rotation in 2025. He added that drug and mega-cap tech stocks have previously led the market, but as their growth rates continue to decline, a rotation is probable. He also emphasized that value names, especially those that have underperformed over the past two years, are expected to make a comeback. Adding to this, Beyrich suggested that these value names have comparable relative growth rates and their valuation multiples, more often than not, are a third of that of the market.
READ MORE: 10 Stocks That Will Make You Rich In 2025 and 12 Best Energy Stocks To Invest In Now.
Speaking of the S&P 500, excluding Big Tech, the market has underperformed, and with the growth rate for the big seven declining, the market emphasis will more likely gear towards value names. Beyrich also added that as rates come down, housing inflation is also expected to decline. He suggested that “abject extremes” are going to help value stocks, especially because the S&P 500 has been trading at 25 times its forward earnings. He emphasized that people have been investing in these stocks because they are scarce, and with growth rates declining, the market will shift away from more expensive names.
On the flip side, Beyrich acknowledged that some of the names are great companies with huge cash flows, but they do have a pricing issue. Beyrich also shed light on the nature of valuations, suggesting that they behave like pendulums, going extremes in both directions. Overall, he remains extremely bullish on cheap companies, especially those with solid catalysts for improvement.
Stocks with a sustainable and long-standing business model are often deemed safer and have been a household name for adults as well as kids.
Our Methodology
To come up with the 10 best kid-friendly stocks to buy right now, we went over multiple similar rankings on the internet. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A child with a wide smile playing with the latest interactive toy.
Mattel, Inc. (NASDAQ:MAT)
Number of Hedge Fund Holders: 25
Mattel, Inc. (NASDAQ:MAT) is a manufacturing and entertainment company based in California, United States. Some of its most prominent brands include Barbie, Hot Wheels, Fisher-Price, American Girl, Thomas & Friends, UNO, and Masters of the Universe. Mattel, Inc. (NASDAQ:MAT) was founded in 1945 and has been a kids’ favorite since its inception. To maintain popularity, the company has been producing more innovative friendly products. For example in December alone, the company announced the global launch of its “Monster High Fangtastic Life” mobile game. During the same month, MAT launched a Barbie-themed dance for the VR game, Synth Riders, in collaboration with Kluge Interactive.
Overall, the company’s popularity is reflected in its financial performance. In the third quarter of 2024, the company generated solid free cash flow over the past 12 months and significantly expanded its gross margin and adjusted EPS. In addition to that, Mattel, Inc. (NASDAQ:MAT) logged $372 in net income, up by $226 million, and $488 in operating income, up by $14 million. While the company saw a slight decline in sales, in the US and internationally, the company has a sustainable business model and is venturing into avenues of entertainment. Analysts are also bullish on the stock and their median price target of $23 represents an upside of 28% from current levels.
Overall MAT ranks 10th on our list of the best kid-friendly stocks to buy now. While we acknowledge the potential of MAT as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.