Hedge Funds Are Buying Skyline Champion Corporation (SKY)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Skyline Champion Corporation (NYSE:SKY).

Skyline Champion Corporation (NYSE:SKY) shareholders have witnessed an increase in hedge fund interest lately. Skyline Champion Corporation (NYSE:SKY) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 27. There were 23 hedge funds in our database with SKY positions at the end of the second quarter. Our calculations also showed that SKY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a gander at the recent hedge fund action surrounding Skyline Champion Corporation (NYSE:SKY).

Chuck Royce of Royce & Associates

Do Hedge Funds Think SKY Is A Good Stock To Buy Now?

At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SKY over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

The largest stake in Skyline Champion Corporation (NYSE:SKY) was held by MAK Capital One, which reported holding $180.2 million worth of stock at the end of September. It was followed by Driehaus Capital with a $72.1 million position. Other investors bullish on the company included Intrinsic Edge Capital, Royce & Associates, and Portolan Capital Management. In terms of the portfolio weights assigned to each position MAK Capital One allocated the biggest weight to Skyline Champion Corporation (NYSE:SKY), around 35.62% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, earmarking 4.8 percent of its 13F equity portfolio to SKY.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the most outsized position in Skyline Champion Corporation (NYSE:SKY). Adage Capital Management had $6 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new SKY investors: Cliff Asness’s AQR Capital Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Skyline Champion Corporation (NYSE:SKY) but similarly valued. We will take a look at Camping World Holdings, Inc. (NYSE:CWH), LCI Industries (NYSE:LCII), Frontier Group Holdings Inc. (NASDAQ:ULCC), Group 1 Automotive, Inc. (NYSE:GPI), fuboTV Inc. (NYSE:FUBO), TechnipFMC plc (NYSE:FTI), and HB Fuller Co (NYSE:FUL). This group of stocks’ market valuations match SKY’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $225 million. That figure was $425 million in SKY’s case. TechnipFMC plc (NYSE:FTI) is the most popular stock in this table. On the other hand HB Fuller Co (NYSE:FUL) is the least popular one with only 9 bullish hedge fund positions. Skyline Champion Corporation (NYSE:SKY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SKY is 81.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on SKY as the stock returned 35.7% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.