Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks, especially when they are screened well, can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze micro-cap stock Iconix Brand Group Inc (NASDAQ:ICON) from their perspective.
Iconix Brand Group Inc (NASDAQ:ICON) was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. Iconix Brand Group Inc investors should be aware of a decrease in support from the world’s most elite money managers of late. There were 18 hedge funds in our database with Iconix Brand Group Inc positions at the end of the previous quarter. At the end of this article we will also compare Iconix Brand Group Inc to other stocks including Ambac Financial Group, Inc. (NASDAQ:AMBC), Fabrinet (NYSE:FN), and WL Ross Holding Corp (NASDAQ:WLRH) to get a better sense of its popularity.
Follow Iconix Brand Group Inc. (NASDAQ:ICON)
Follow Iconix Brand Group Inc. (NASDAQ:ICON)
In today’s marketplace there are many indicators stock market investors use to value stocks. A couple of the less utilized indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top money managers can beat the market by a very impressive amount (see the details here).
With all of this in mind, let’s take a glance at the new action regarding Iconix Brand Group Inc (NASDAQ:ICON).
What have hedge funds been doing with Iconix Brand Group Inc (NASDAQ:ICON)?
Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a steep 39% fall from the second quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly (or had already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joe Huber’s Huber Capital Management has the most valuable position in Iconix Brand Group Inc (NASDAQ:ICON), worth close to $75.3 million, accounting for 2.6% of its total 13F portfolio. The second-largest stake is held by Wallace Weitz’s Wallace R. Weitz & Co., with a $42.4 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Ken Griffin’s Citadel Investment Group, David Keidan’s Buckingham Capital Management, and Steve Pei’s Gratia Capital.
Because Iconix Brand Group Inc (NASDAQ:ICON) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds who were dropping their entire stakes by the end of the third quarter. Interestingly, Christian Leone’s Luxor Capital Group said goodbye to the largest stake of the 700 funds watched by Insider Monkey, comprising an estimated $19.9 million in stock. Renaissance Technologies also dumped its stock, about $8.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 7 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Iconix Brand Group Inc (NASDAQ:ICON). We will take a look at Ambac Financial Group, Inc. (NASDAQ:AMBC), Fabrinet (NYSE:FN), WL Ross Holding Corp (NASDAQ:WLRH), and Array Biopharma Inc (NASDAQ:ARRY). This group of stocks’ market values resemble Iconix Brand Group Inc’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMBC | 27 | 177840 | -2 |
| FN | 20 | 115402 | 7 |
| WLRH | 13 | 141759 | 2 |
| ARRY | 22 | 266197 | 1 |
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $175 million. That figure was $157 million in Iconix Brand Group Inc’s case. Ambac Financial Group, Inc. (NASDAQ:AMBC) is the most popular stock in this table. On the other hand WL Ross Holding Corp (NASDAQ:WLRH) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Iconix Brand Group Inc (NASDAQ:ICON) is even less popular than WL Ross, and sentiment has taken a big dive. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock and why there was a mass exodus from it during the third quarter.
