Hedge Funds Are Betting On Deckers Outdoor Corp (DECK)

Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.

Deckers Outdoor Corp (NYSE:DECK) has experienced an increase in enthusiasm from smart money of late. 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 Anixter International Inc. (NYSE:AXE), Superior Energy Services, Inc. (NYSE:SPN), and Meredith Corporation (NYSE:MDP) to gather more data points.

In the eyes of most investors, hedge funds are seen as slow, outdated investment tools of years past. While there are greater than 8000 funds in operation today, our researchers hone in on the masters of this club, around 700 funds. These money managers handle bulk of the hedge fund industry’s total asset base, and by keeping track of their best investments, Insider Monkey has revealed several investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, we’re going to take a look at the fresh action surrounding Deckers Outdoor Corp (NYSE:DECK).

How are hedge funds trading Deckers Outdoor Corp (NYSE:DECK)?

At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 4% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Willem Mesdag’s Red Mountain Capital has the largest position in Deckers Outdoor Corp (NYSE:DECK), worth close to $61.2 million, corresponding to 16.2% of its total 13F portfolio. The second most bullish fund manager is AQR Capital Management, led by Cliff Asness, holding a $54.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of Chuck Royce’s Royce & Associates, Richard Mashaal’s Rima Senvest Management, and Ken Griffin’s Citadel Investment Group.

Consequently, key money managers have been driving this bullishness. Buckingham Capital Management, managed by David Keidan, created the most valuable position in Deckers Outdoor Corp (NYSE:DECK). Buckingham Capital Management had $20.7 million invested in the company at the end of the quarter. Gilchrist Berg’s Water Street Capital also initiated a $15.1 million position during the quarter. The other funds with new positions in the stock are Steven Boyd’s Armistice Capital, Gilchrist Berg’s Water Street Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s now review hedge fund activity in other stocks similar to Deckers Outdoor Corp (NYSE:DECK). We will take a look at Anixter International Inc. (NYSE:AXE), Superior Energy Services, Inc. (NYSE:SPN), Meredith Corporation (NYSE:MDP), and HNI Corp (NYSE:HNI). All of these stocks’ market caps are closest to Deckers Outdoor Corp (NYSE:DECK)’s market cap.

As you can see, these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $316 million. That figure was $364 million in Deckers Outdoor Corp (NYSE:DECK)’s case. Anixter International Inc. (NYSE:AXE) is the most popular stock in this table. On the other hand, HNI Corp (NYSE:HNI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks, Deckers Outdoor Corp (NYSE:DECK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.