MAT designs, manufactures, markets and distributes a variety of family products on a worldwide basis. For the FYended 12/31/00, net sales increased 2% to $4.67B. Net income applicable to Common from continuing operations rose 63% to $170.2M. Revenues reflect an increase in sales of Barbie(R), Fisher-Price and Hot Wheels products. Net incomereflects the inclusion of a lower restructuring charge of $15.9M vs. $281.1M in the prior year.

March 15, 2001

Shares of MAT hit an all-time high of $46.56 on 3/16/98. The stock then sold off for two years, hitting a low of $8.93 on 3/10/00. Since then, MAT has made significant changes. The company has hired a new CEO and absorbed the cost of its poor acquisition of The Learning Company. In the past year, Mattel’s net income from continuing operations (up 63% on the year) and the stock price (up 90% over the past 6 months) reflect the changes within the company. MAT traded to a 52-week high of $18.84 last week, and on Thursday, the stock closed at its intra-day high of $18.55. We believe that MAT could continue to hit a string of new 52-week highs due to its strong momentum and improving fundamentals. From a technical standpoint, support is the 5-dma at $18.34 with stronger support at $17.78, the 10-dma. Resistance is the 52-week high of $18.84 and then possibly $19.50 or $20. Traders may consider entry points on a bounce off of $18.34 or a breakout above $18.84 on volume greater than 1.3 million shares by noon. We are placing stops at $17 as downside protection.

Picked on March 15th @ $18.55
Change since picked +0.00
Stop Loss @ $17.00