There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze G-III Apparel Group, Ltd. (NASDAQ:GIII) .
Is G-III Apparel Group, Ltd. (NASDAQ:GIII) ready to rally soon? Prominent investors are definitely taking a bearish view. The number of long hedge fund bets slashed by 1 recently. There were 11 hedge funds in our database with GIII holdings at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Caesarstone Ltd (NASDAQ:CSTE), CNOOC Limited (ADR) (NYSE:CEO), and FirstCash Inc. (NYSE:FCFS) to gather more data points.
Follow G Iii Apparel Group Ltd (NASDAQ:GIII)
Follow G Iii Apparel Group Ltd (NASDAQ:GIII)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, we’re going to take a look at the new action surrounding G-III Apparel Group, Ltd. (NASDAQ:GIII).
What have hedge funds been doing with G-III Apparel Group, Ltd. (NASDAQ:GIII)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 8% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards GIII over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Buckingham Capital Management, led by David Keidan, holds the most valuable position in G-III Apparel Group, Ltd. (NASDAQ:GIII). Buckingham Capital Management has a $19.2 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is Water Street Capital, led by Gilchrist Berg, which holds a $17.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish encompass Larry Foley and Paul Farrell’s Bronson Point Partners, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all institutional investors are bullish on the stock and some funds actually dumped their positions entirely. It’s worth mentioning that Chuck Royce’s Royce & Associates dumped the biggest stake of all the hedgies watched by Insider Monkey, comprising an estimated $32.5 million in stock, and Joel Greenblatt’s Gotham Asset Management was right behind this move, as the fund dumped about $9.7 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as G-III Apparel Group, Ltd. (NASDAQ:GIII) but similarly valued. We will take a look at Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE), CNOOC Limited (ADR) (NYSE:CEO), FirstCash Inc. (NYSE:FCFS), and Lakeland Financial Corporation (NASDAQ:LKFN). This group of stocks’ market values are closest to GIII’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSTE | 11 | 125822 | 1 |
| CEO | 9 | 99931 | -3 |
| FCFS | 14 | 145967 | 5 |
| LKFN | 8 | 7818 | 2 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $78 million in GIII’s case. FirstCash Inc. (NYSE:FCFS) is the most popular stock in this table. On the other hand Lakeland Financial Corporation (NASDAQ:LKFN) is the least popular one with only 8 bullish hedge fund positions. G-III Apparel Group, Ltd. (NASDAQ:GIII) 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 FCFS might be a better candidate to consider taking a long position in.
Disclosure: None
