The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Crocs, Inc. (NASDAQ:CROX).
Crocs, Inc. (NASDAQ:CROX) investors should be aware of an increase in hedge fund interest recently. Crocs, Inc. (NASDAQ:CROX) was in 40 hedge funds’ portfolios at the end of June. The all time high for this statistic is 41. There were 31 hedge funds in our database with CROX holdings at the end of March. Our calculations also showed that CROX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
John Overdeck of Two Sigma Advisors
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Do Hedge Funds Think CROX Is A Good Stock To Buy Now?
At Q2’s end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the first quarter of 2020. By comparison, 37 hedge funds held shares or bullish call options in CROX a year ago. So, let’s see 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, Robert Pohly’s Samlyn Capital has the number one position in Crocs, Inc. (NASDAQ:CROX), worth close to $124.7 million, amounting to 1.8% of its total 13F portfolio. On Samlyn Capital’s heels is Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $114.1 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Bernard Horn’s Polaris Capital Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Polaris Capital Management allocated the biggest weight to Crocs, Inc. (NASDAQ:CROX), around 3.18% of its 13F portfolio. Woodson Capital Management is also relatively very bullish on the stock, designating 2.74 percent of its 13F equity portfolio to CROX.
As aggregate interest increased, key money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Crocs, Inc. (NASDAQ:CROX). Marshall Wace LLP had $35.4 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also initiated a $34.7 million position during the quarter. The other funds with new positions in the stock are Steven Boyd’s Armistice Capital, D. E. Shaw’s D E Shaw, and Brad Stephens’s Six Columns Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Crocs, Inc. (NASDAQ:CROX) but similarly valued. These stocks are Old Republic International Corporation (NYSE:ORI), Shift4 Payments, Inc. (NYSE:FOUR), Kingsoft Cloud Holdings Limited (NASDAQ:KC), Chemed Corporation (NYSE:CHE), Ternium S.A. (NYSE:TX), Hill-Rom Holdings, Inc. (NYSE:HRC), and Knight-Swift Transportation Holdings Inc. (NYSE:KNX). This group of stocks’ market values match CROX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORI | 26 | 366916 | 2 |
| FOUR | 31 | 615370 | -2 |
| KC | 12 | 67297 | -4 |
| CHE | 30 | 313539 | 6 |
| TX | 15 | 213272 | 1 |
| HRC | 22 | 387344 | -8 |
| KNX | 26 | 270712 | 1 |
| Average | 23.1 | 319207 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $319 million. That figure was $931 million in CROX’s case. Shift4 Payments, Inc. (NYSE:FOUR) is the most popular stock in this table. On the other hand Kingsoft Cloud Holdings Limited (NASDAQ:KC) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Crocs, Inc. (NASDAQ:CROX) is more popular among hedge funds. Our overall hedge fund sentiment score for CROX is 89.3. 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 returned 21.8% in 2021 through October 11th but still managed to beat the market by 4.4 percentage points. Hedge funds were also right about betting on CROX as the stock returned 7.8% since the end of June (through 10/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
