Abercrombie & Fitch Co. (NYSE:ANF)’s stock plunged by over 17% so far today, on the back of the company posting a first-quarter loss of $39.6 million, or $0.59 per share, worse than the analysts’ estimates of $0.50 per share. Revenue declined by 3% on the year to $685.5 million and was $24.76 million below estimates. The company also reported comparable sales at international stores down by 7% in the quarter, below the estimates of a 0.2% growth. Abercrombie & Fitch’s CEO Chairman Arthur Martinez attributed the decline to “traffic headwinds” in the international markets. Mr. Martinez added that the company has ceased the promotions, and currently sells the merchandise at full price. He ruled out the possibility of a pricing strategy shift by the company.
Despite the fact that Abercrombie & Fitch has registered several quarters of revenue decline, hedge funds seem to like the company. Abercrombie & Fitch Co. (NYSE:ANF) was in 31 hedge funds’ portfolios at the end of March. ANF shareholders have witnessed an increase in support from the world’s most elite money managers lately. There were 29 hedge funds in our database with ANF positions at the end of the previous quarter. At the end of this article we will also compare ANF to other stocks, including Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS), Dycom Industries, Inc. (NYSE:DY), and HB Fuller Co (NYSE:FUL) to get a better sense of its popularity.
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According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies holds the number one position in Abercrombie & Fitch Co. (NYSE:ANF). Renaissance Technologies has a $45 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $30.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish encompass David Costen Haley’s HBK Investments, John Tompkins’s Tyvor Capital and D. E. Shaw’s D E Shaw.
Since the number of funds bullish on Abercrombie & Fitch went up during the first quarter, let’s take a look at some funds that added the stock to their equity portfolios on the next page.
Winton Capital Management, managed by David Harding, established the largest position in Abercrombie & Fitch Co. (NYSE:ANF). Winton Capital Management had $6.3 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also initiated a $5.5 million position during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Solomon Kumin’s Folger Hill Asset Management, and Mike Vranos’s Ellington.
Let’s check out hedge fund activity in other stocks similar to Abercrombie & Fitch Co. (NYSE:ANF). We will take a look at Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS), Dycom Industries, Inc. (NYSE:DY), HB Fuller Co (NYSE:FUL), and GrubHub Inc (NYSE:GRUB). This group of stocks’ market values are closest to ANF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VLRS | 12 | 177995 | 1 |
| DY | 33 | 450108 | 3 |
| FUL | 18 | 158683 | 5 |
| GRUB | 23 | 636276 | -1 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $356 million. That figure was $320 million in ANF’s case. Dycom Industries, Inc. (NYSE:DY) is the most popular stock in this table. On the other hand Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) is the least popular one with only 12 bullish hedge fund positions. Abercrombie & Fitch Co. (NYSE:ANF) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DY might be a better candidate to consider a long position.
Disclosure: None
