Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Deckers Outdoor Corporation (NYSE:DECK) in this article.
Deckers Outdoor Corporation (NYSE:DECK) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. DECK was in 26 hedge funds’ portfolios at the end of the third quarter of 2019. There were 25 hedge funds in our database with DECK positions at the end of the previous quarter. Our calculations also showed that DECK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s view the fresh hedge fund action surrounding Deckers Outdoor Corporation (NYSE:DECK).
Hedge fund activity in Deckers Outdoor Corporation (NYSE:DECK)
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DECK over the last 17 quarters. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Deckers Outdoor Corporation (NYSE:DECK), with a stake worth $181.8 million reported as of the end of September. Trailing AQR Capital Management was Arrowstreet Capital, which amassed a stake valued at $56.1 million. Miura Global Management, Point72 Asset Management, and Marshall Wace were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Miura Global Management allocated the biggest weight to Deckers Outdoor Corporation (NYSE:DECK), around 5.84% of its portfolio. North Fourth Asset Management is also relatively very bullish on the stock, setting aside 1.79 percent of its 13F equity portfolio to DECK.
As one would reasonably expect, key money managers have jumped into Deckers Outdoor Corporation (NYSE:DECK) headfirst. Interval Partners, managed by Gregg Moskowitz, created the largest position in Deckers Outdoor Corporation (NYSE:DECK). Interval Partners had $10.3 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also made a $8.7 million investment in the stock during the quarter. The other funds with brand new DECK positions are Matthew Hulsizer’s PEAK6 Capital Management, Anthony Joseph Vaccarino’s North Fourth Asset Management, and George McCabe’s Portolan Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Deckers Outdoor Corporation (NYSE:DECK) but similarly valued. These stocks are Wyndham Destinations, Inc. (NYSE:WYND), Perspecta Inc. (NYSE:PRSP), Service Properties Trust (NASDAQ:SVC), and Tempur Sealy International Inc. (NYSE:TPX). This group of stocks’ market valuations are similar to DECK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WYND | 21 | 521654 | -1 |
| PRSP | 40 | 719169 | 0 |
| SVC | 13 | 48463 | 0 |
| TPX | 29 | 1355351 | -4 |
| Average | 25.75 | 661159 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $661 million. That figure was $415 million in DECK’s case. Perspecta Inc. (NYSE:PRSP) is the most popular stock in this table. On the other hand Service Properties Trust (NASDAQ:SVC) is the least popular one with only 13 bullish hedge fund positions. Deckers Outdoor Corporation (NYSE:DECK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on DECK as the stock returned 14.1% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
