Here is What Hedge Funds Think About The Buckle, Inc. (BKE)

It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.

Is The Buckle, Inc. (NYSE:BKE) a first-rate investment today? The smart money is buying. The number of bullish hedge fund bets inched up by 3 in recent months. BKE was in 16 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with BKE positions at the end of the previous quarter. At the end of this article we will also compare BKE to other stocks including Grand Canyon Education Inc (NASDAQ:LOPE), Plantronics, Inc. (NYSE:PLT), and CACI International Inc (NYSE:CACI) to get a better sense of its popularity.

With all of this in mind, let’s take a look at the latest action regarding The Buckle, Inc. (NYSE:BKE).

What does the smart money think about The Buckle, Inc. (NYSE:BKE)?

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in The Buckle, Inc. (NYSE:BKE). Royce & Associates has a $227.8 million position in the stock, comprising 1.2% of its 13F portfolio. On Royce & Associates’s heels is Joel Greenblatt of Gotham Asset Management, with an $7.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Jim Simons’s Renaissance Technologies, Eric Sprott’s Sprott Asset Management and Andy Redleaf’s Whitebox Advisors.

As aggregate interest increased, some big names have jumped into The Buckle, Inc. (NYSE:BKE) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most outsized position in The Buckle, Inc. (NYSE:BKE). Arrowstreet Capital had $2.2 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made an $0.3 million investment in the stock during the quarter. The following funds were also among the new BKE investors: David Dreman’s Dreman Value Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Buckle, Inc. (NYSE:BKE) but similarly valued. These stocks are Grand Canyon Education Inc (NASDAQ:LOPE), Plantronics, Inc. (NYSE:PLT), CACI International Inc (NYSE:CACI), and QTS Realty Trust Inc (NYSE:QTS). This group of stocks’ market valuations match BKE’s market valuation.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $258 million in BKE’s case. Grand Canyon Education Inc (NASDAQ:LOPE) is the most popular stock in this table. On the other hand QTS Realty Trust Inc (NYSE:QTS) is the least popular one with only 10 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. This is a positive signal that makes BKE worth a closer look.