You can tell from his opening remarks that my colleague, Rich Smith, is a lawyer by training. Like any good attorney, he chose to focus on a couple of bright spots, while completely ignoring the glaring negatives relating to Mattel's
In his earlier piece, we heard quite a lot about the company's dividend and buybacks and very little about its:
- Declining margins;
- Disappointing returns over the last couple of years;
- Relatively weak five-year annualized growth rates compared with direct competitors such as Hasbro
(NYSE:HAS), JAKKS Pacific (NASDAQ:JAKK), RC2 (NASDAQ:RCRC), and LeapFrog Enterprises (NYSE:LF);
- Unimpressive business strategy that focuses on raising prices and giving Barbie more shelf space.
For Rich, Mattel is apparently all gain and no pain, despite a mountain of evidence that suggests otherwise. With such a cheery outlook, we now know that, despite my earlier skepticism, Rich Smith is Santa Claus. And while there's nothing wrong with a little fantasy at this time of year, it's probably best to rely on reason and solid arguments when buying and selling stocks.
Wait! You're not done. This is just a quarter of the Duel! Don't miss the Bull and Bear opening arguments and the Bull rebuttal. Even when you're done, you're still not done. You can vote and let us know who you think won this Duel.
John Reeves does not own shares in any of the companies mentioned. The Motley Fool has a disclosure policy.