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Mattel's Barbie dolls on sale are pictured inside a shop of a life-size "Barbie Dreamhouse" during a media tour in Berlin, in a May 15, 2013 file photo.

FABRIZIO BENSCH/Reuters

In the battle for U.S. holiday toy spending, the empire has the upper hand. At least that's the view in the stock market.

Just ahead of Black Friday, short interest on Mattel Inc. is hovering near an all-time high, reflecting skepticism the toymaker will deliver this holiday season. After surging all year, bearish bets as a percentage of shares outstanding sit at about 21 per cent for the El Segundo, Calif.a-based manufacturer, just below a record of almost 22 per cent in October, according to data compiled by Bloomberg and Markit Ltd.

Pessimism is lingering even after Mattel, maker of Barbie dolls and Hot Wheels toys, broke out of a downward price trend monitored by chart analysts and recently attracted a 9.1 million-share investment from hedge fund Jana Partners LLC, led by frequent activist founder Barry Rosenstein.

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By comparison, investors are sanguine on Mattel's biggest publicly traded competitor: Hasbro Inc., which has a licensing agreement to sell merchandise related to the Dec. 18 release of "Star Wars: The Force Awakens." Short interest as a percentage of shares outstanding on Hasbro is 4.3 per cent, down from a one- year high of 9.8 per cent in March.

The stock is up 38 per cent in 2015, almost 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, founder and director of research at Greenwich, Conn.-based Technical Alpha Inc. Investors may be doubling down on past performance after "Hasbro's been killing it since 2013 and Mattel has been the laggard."

From March 1, 2013, through the end of the third quarter, Hasbro shares outperformed Mattel by 128 percentage points. Since then, Mattel has led Hasbro by about 10 points. The bull case for Hasbro is "so well telegraphed and everybody sees it now," which prompted Stellakis to issue a sell recommendation on the stock a few weeks ago. "There's been a huge divergence between the two stocks, but that seems to be starting to switch."

Mattel missed the median forecast of analysts' sales expectations in seven of the past eight quarters. By comparison, Hasbro was below the consensus estimate in only five and beat expectations for earnings in seven of eight quarters.

Investors may be too skeptical on Mattel, particularly as the toymaker could be "gaining some steam" ahead of the all- important sales season, said Sean McGowan, an analyst at Oppenheimer & Co. The bear case for the stock has many of the same elements of the past few years: sluggish sales and currency headwinds. "Expectations continue to be that Mattel is struggling."

Mr. McGowan rated the company an outperform in August, primarily because of better shipment figures and a less pessimistic fourth-quarter outlook from the company, he said. Even after Mattel reported third-quarter sales and earnings that missed analysts expectations on Oct. 15, the stock jumped 6 per cent the next day.

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Forecasts call for slower sales during the holiday season this year, according to the National Retail Federation and Deloitte LLP. Even so, an NFR survey showed 21 per cent of holiday shoppers plan to purchase a Barbie for girls, topping the list after losing out to characters from the movie "Frozen" in 2014. Star Wars landed in the No. 2 spot on the boys list for this year, and made No. 10 on the girls list.

While there's a lot of hype around the first Star Wars movie in seven years, that may not necessarily translate to sales of related merchandise for Hasbro.

"Expectations are that Hasbro will have a great holiday season," Mr. McGowan said. "We're not sure what the outcome will be yet though."

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