Thursday, April 23, 2015
Any thoughts on MAT??
Last September I bought 165 shares of MAT thinking it might be a good contrarian investment. The price at the time was around $30 and I have watched plummet to $22 at the beginning of this month only to come storming back in the last three weeks.
I can't completely wrap my hands around this stock. Is it a value trap or a turn around story. The good news is they have paid a couple of dividends already and are paying another one in June. But is that really what I want to invest in? A company that was fortunate to make another dividend payment for at least one more quarter. I don't know.
My hunch is this should be a $40 stock, but I would not be surprised to see $20 either. I am seriously considering selling my shares which are trading around $28.50 and taking an $80 loss counting the dividends I have already received.
I have tried to take steps to add lower beta companies to my portfolio this year and I might be better off adding another utility or perhaps more shares of companies like JNJ, CAT, or KO. The yields are lower, but the risk is much lower as well. Also any of these three could provide a stable YOC of 5% within the next four or five years anyway.
I think I am 80/20 leaning towards selling off the whole position. I really hate selling stocks and need to work harder at adding positions that I can keep for many years.