While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding The Buckle, Inc. (NYSE:BKE).
The Buckle, Inc. (NYSE:BKE) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 25. BKE investors should pay attention to a decrease in enthusiasm from smart money recently. There were 25 hedge funds in our database with BKE holdings at the end of June. Our calculations also showed that BKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ken Heebner of Capital Growth Management
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 view the fresh hedge fund action encompassing The Buckle, Inc. (NYSE:BKE).
Do Hedge Funds Think BKE Is A Good Stock To Buy Now?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BKE over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Heebner’s Capital Growth Management has the largest position in The Buckle, Inc. (NYSE:BKE), worth close to $27.3 million, comprising 2.5% of its total 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $23.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jack Woodruff’s Candlestick Capital Management, Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to The Buckle, Inc. (NYSE:BKE), around 2.51% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, setting aside 2.23 percent of its 13F equity portfolio to BKE.
Since The Buckle, Inc. (NYSE:BKE) has faced a decline in interest from the smart money, it’s easy to see that there were a few funds who were dropping their full holdings in the third quarter. Intriguingly, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling about $19.9 million in call options, and Brad Stephens’s Six Columns Capital was right behind this move, as the fund said goodbye to about $10 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to The Buckle, Inc. (NYSE:BKE). These stocks are SJW Corp. (NYSE:SJW), Paramount Group Inc (NYSE:PGRE), Euronav NV (NYSE:EURN), AMC Networks Inc (NASDAQ:AMCX), Delek Logistics Partners LP (NYSE:DKL), Seacoast Banking Corporation of Florida (NASDAQ:SBCF), and AST SpaceMobile Inc. (NASDAQ:ASTS). This group of stocks’ market caps are similar to BKE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SJW | 9 | 64777 | 2 |
| PGRE | 15 | 122034 | -2 |
| EURN | 15 | 66214 | -2 |
| AMCX | 24 | 158841 | 5 |
| DKL | 1 | 939 | -2 |
| SBCF | 12 | 34029 | 1 |
| ASTS | 12 | 48915 | -3 |
| Average | 12.6 | 70821 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $152 million in BKE’s case. AMC Networks Inc (NASDAQ:AMCX) is the most popular stock in this table. On the other hand Delek Logistics Partners LP (NYSE:DKL) is the least popular one with only 1 bullish hedge fund positions. The Buckle, Inc. (NYSE:BKE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKE is 78.4. 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 BKE as the stock returned 29.1% 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.
