Toying with the idea of buying Mattel stock? Brokerage house claims it is not a good buy.Toying with the idea of buying Mattel stock? Brokerage house claims it is not a good buy Mattel Inc., the Hawthorne-based manufacturer of the Barbie doll Barbie doll popular dress-up doll; extremely conventional and feminine. [Am. Hist.: Sann, 179] See : Fads , Hot Wheels Hot Wheels is a brand of die cast toy car, introduced by American toymaker Mattel in 1968. It was the primary competitor of Johnny Lightning and Matchbox until 1996, when Mattel acquired rights to the Matchbox brand from Tyco. and other toys, is not a good buy on Wall Street, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a recent report issued by Duff & Phelps, the Chicago-based investment advisory firm. The $1.47 billion-in-sales Mattel is having a good year, and earnings are up nicely in the last three years, but Wall Street has put a pretty price on Wall Street shares, said Duff & Phelps. With Mattel shares trading last week in the $25-a-share range - giving it a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of about $1 billion - Wall Street has fully anticipated the toy firm's improving balance sheet and improved profits, said Duff & Phelps. The securities firm estimated Mattel would earn $118 million on revenues of $1.67 billion in 1991, compared with $91 million on revenues of $1.47 billion last year. Sales of Barbie dolls now make up 50 percent of Mattel revenues; the doll has remarkable staying power with consumers. An astonishing a·ston·ish tr.v. as·ton·ished, as·ton·ish·ing, as·ton·ish·es To fill with sudden wonder or amazement. See Synonyms at surprise. 90 percent of American girls have Barbie dolls, as did many of their mothers. This steady product affinity tends to shield Mattel from the normal "boom or bust or collapse from the effort; - used in phrases expressing determination to do something; as, Oregon or bust, meaning "We will get to Oregon or die trying." s> See also: bust " cycle that afflicts many toymakers, said Duff & Phelps. Based on products like Barbie Barbie in full Barbara Millicent Roberts A plastic doll, 11.5 in. (29 cm) tall, with the figure of an adult woman that was introduced in 1959 by Mattel, Inc., a southern California toy company. and the Hot Wheels toys, Duff & Phelps projected Mattel's earnings per share would jump to $2.55 a share in 1992, compared with $2.30 a share this year and $1.80 a share last year. Duff & Phelps rated Mattel's subordinated debentures (junior bonds) "BB-," a speculative rating, despite Mattel paying down debt in recent years. One risk to shareholders and bondholders: Having paid down debt, Mattel management may be tempted to go out and borrow some money to make corporate acquisitions. "The one caveat we would like to highlight is that management may apply the company's building cash position to a sizable acquisition," said Duff & Phelps analyst Carol Palmer. John Amerman, Mattel chairman and chief executive, assumed his titles in 1987, when Mattel was a money-loser. By restraining expenditures and focusing company efforts on proven moneymakers such as the Barbie doll, Amerman has been credited for a dramatic corporate turnaround at Mattel, said Duff & Phelps. |
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