Tuesday 20 August 2019

Darth Vader beating Barbie in sales battle

SURPRISE: Darth Vader and Barbie are likely to be under the tree this year
SURPRISE: Darth Vader and Barbie are likely to be under the tree this year

Anna-Louise Jackson

In the battle for Christmas toy spending, the Empire has the upper hand. At least that's the view in the stock market. Last week, short interest on Barbie-maker Mattel was hovering near an all-time high, reflecting speculation that the toymaker will deliver this Christmas.

After surging all year, bearish bets as a percentage of shares outstanding sit at about 21pc for the California-based manufacturer, just below a record of almost 22pc in October, according to data compiled by Bloomberg and Markit.

By comparison, investors are sanguine on Mattel's biggest publicly traded competitor, Hasbro, which has a licensing agreement to sell merchandise related to the December 18 release of Star Wars: The Force Awakens. Short interest as a percentage of shares outstanding on Hasbro is 4.3pc, down from a one-year high of 9.8pc in March. The stock is up 39pc in 2015, about three times as much as consumer discretionary stocks in the S&P 500.

"It's a massive short on Mattel," some of which probably reflects a 'piling on' effect, said Jim Stellakis of Technical Alpha Investors.

From March 1, 2013, through the end of the third quarter, Hasbro shares outperformed Mattel by 128 percentage points. Since then, however, Mattel leads Hasbro by almost 12 points.

A NFR survey showed that 21pc of holiday shoppers in the key US market plan to purchase a Barbie for girls, topping the list after losing out to characters from the movie Frozen in 2014.

Star Wars landed the No 2 spot on the boys' list for this year, and made No 10 on the girls' list.

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