Mattel Inc. (MAT) shares jumped more than 6 percent Tuesday, the highest intraday PPS since July 2007, following news that billionaire Carl Icahn, known for his activist stances and battles with boards, built up a new stake in the toy manufacturer.
In its 13F filing with the SEC, Icahn’s Icahn Capital LP disclosed a 2.43 million share stake in the company, amassed during the third quarter.
The El Segundo, Calif.-based Mattel announced Monday that it would be buying back $500 million worth of shares, and would raise its 2010 quarterly dividend to 83 cents a share from a 2009 dividend of 75 cents a share. The co. also said it will be switching from annual to quarterly dividends beginnin in 2011.
Technically speaking, MAT continues to display strong relative strength this morning after it broke out to a new 3-year high over $25 on heavy volume. Today’s volume is massive: nearly 7 million shares have traded hand so far into the session. MAT’s average volume over the last 13 weeks is 4.7 million shares.
At this point, is too early to say whether all of the action following today’s high volume breakout is consolidative in nature. But certainly there is no resistance in this vicinity, and the stock could be on its way higher over the near-term if the bulls can sustain the buying.
Mattel is up more than 14% since the beginning of the year. The security has been in a relatively steady uptrend since early September. After initially displaying a narrow range intraday along the mid $20 area, the ticker was able to consolidate above its 50-day and 200-day moving averages: $23.29 ; $22.39, respectively. The shares of Mattel have seen a few dips down off the highs in recent weeks, but all of them were bought, allowing the stock to stabilize and find support in the $22 level, which prompted MAT’s next leg up in the mid-$24 area.
Mattel shares currently trade at a trailing P/E of 13.27, a forward multiple of 12.62 and a PEG 5-yr ratio of 1.54.
At last check, Mattel shares were up $1.08 to $24.64, a gain of nearly 5%.