Heading into the holiday shopping season, there is one stock veteran value investor John Rogers (Trades, Portfolio) particularly likes.
In an interview with CNBC’s “Squawk Box” on Monday, the co-CEO and chief investment officer of Chicago-based Ariel Investment shared why he sees value in toymaker Mattel Inc. (MAT, Financial).
While he noted the broad markets are still quite expensive, there are pockets of opportunity to be found, especially among consumer products, media and sports companies.
Rogers said the El Segundo, California-based toymaker is one of the firm’s favorite stocks currently, citing its turnaround under Chairman and CEO Ynon Kreiz.
“Quarter after quarter, I think it is six or seven quarters in a row, he has far surpassed expectations,” Rogers said. “He has brought Barbie back to life; he’s doing wonderful things with American Girl and Fisher-Price and all the IP for the movies coming out next year. Mattel is an extraordinary value, we think, here today.”
The initiatives Rogers outlined appear to have been a boon to the company.
On Oct. 21, Mattel reported strong third-quarter results, posting earnings of 84 cents per share on $1.76 billion in revenue. Analysts polled by Refinitiv were anticipating earnings of 72 cents on $1.69 billion in sales.
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As of the end of the second quarter, Ariel held 15.6 million shares of Mattel, which represent 2.95% of the equity portfolio and is its seventh-largest holding. Since the second quarter of 2015, GuruFocus estimates the firm has gained 20.50% on the investment.
While Primecap Management has the largest stake in Mattel currently with 13.35% of its outstanding shares, Roger’s firm has the third-largest position with 4.48%. Mason Hawkins (Trades, Portfolio) and the T Rowe Price Equity Income Fund (Trades, Portfolio) also have significant holdings.
With a $7.9 billion market cap, shares of Mattel were up 4.12% in Monday morning trading at $22.63. Year to date, GuruFocus estimates the stock has climbed 29.1%. In comparison, rival toymaker Hasbro Inc. (HAS, Financial) has risen 3.2% over the same period.
