Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. What do these smart investors think about Coach Inc (NYSE:COH)?
Coach Inc (NYSE:COH) investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. At the end of this article we will also compare COH to other stocks including BRF Brasil Foods SA (ADR) (NYSE:BRFS), Cimarex Energy Co (NYSE:XEC), and L-3 Communications Holdings, Inc. (NYSE:LLL) to get a better sense of its popularity.
Follow Tapestry Inc. (NYSE:TPR)
Follow Tapestry Inc. (NYSE:TPR)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Copyright: dolgachov / 123RF Stock Photo
With all of this in mind, we’re going to analyze the new action regarding Coach Inc (NYSE:COH).
What does the smart money think about Coach Inc (NYSE:COH)?
Heading into the fourth quarter of 2016, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a decreased of 11% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Shellback Capital, managed by Doug Gordon, Jon Hilsabeck and Don Jabro, holds the largest position in Coach Inc (NYSE:COH). The fund reportedly has a $24.3 million position in the stock, comprising 2.1% of its 13F portfolio. Coming in second is Buckingham Capital Management, managed by David Keidan, which holds a $20.4 million stake; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism include David Harding’s Winton Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Joel Greenblatt’s Gotham Asset Management.
Because Coach Inc (NYSE:COH) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedge funds that elected to cut their full holdings in the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management sold off the largest investment of all the hedgies followed by Insider Monkey, totaling about $89.4 million in stock, and Josh Resnick’s Jericho Capital Asset Management was right behind this move, as the fund dropped about $67.2 million worth of COH shares. These moves are intriguing to say the least, as total hedge fund interest was cut by 4 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Coach Inc (NYSE:COH). We will take a look at BRF Brasil Foods SA (ADR) (NYSE:BRFS), Cimarex Energy Co (NYSE:XEC), L-3 Communications Holdings, Inc. (NYSE:LLL), and Linear Technology Corporation (NASDAQ:LLTC). This group of stocks’ market values are similar to COH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRFS | 8 | 172293 | -1 |
| XEC | 43 | 1635342 | 4 |
| LLL | 34 | 771957 | 1 |
| LLTC | 31 | 1625781 | 6 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1.05 billion. That figure was just $221 million in COH’s case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand BRF Brasil Foods SA (ADR) (NYSE:BRFS) is the least popular one with only 8 bullish hedge fund positions. Coach Inc (NYSE:COH) 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 XEC might be a better candidate to consider a long position.
Disclosure: none.
