3 Cheap Stocks To Buy In Q3 For Big Upside

Zacks Investment Research

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Analysts quickly raised their EPS estimates following MAT’s strong quarter. The stock has also seen some positive revisions in the last seven days as well, which means some might be expecting big things from the toy and games maker’s Q2 financial release on Tuesday, July 27.

The stock lands a Zacks Rank #2 (Buy) right now, alongside “A” grades for Growth and Momentum in our Style Score system. And eight of the 11 brokerage recommendations Zacks has for the stock are “Strong Buys,” with the other three at a “Hold.”

MAT shares have jumped 12% in 2021 and 75% in the past 12 months to blow away its highly-ranked Toys-Games-Hobbies industry that includes TakeTwo Interactive (TTWO Quick Quote TTWO - Free Report) and Hasbro (HAS Quick Quote HAS - Free Report). Despite its outperformance, MAT trades at a solid discount to its industry at 17.8X forward 12-month earnings vs. 24.6X.

Like its peers on this list, Mattel stock has retreated from its highs in the last several months, closing Tuesday nearly 15% below its early May levels. Perhaps more importantly, MAT trades 40% below the $33 a share it traded at in 2016 and even further under the $45 it hit in 2013. And the stock sits beneath neutral RSI (50) levels at 45.

MAT’s growth outlook suggests there could be an active push from some parents for their kids to spend less time on screens in a world where more people are addicted to devices. Mattel is also ready to roll out some movies and TV Shows. “We gained global market share and continued to transform Mattel into an IP-driven, high performing toy company,” Ynon Kreiz said in prepared remarks last year.

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