The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Tapestry, Inc. (NYSE:TPR) based on those filings.
Is Tapestry, Inc. (NYSE:TPR) going to take off soon? The best stock pickers are getting more optimistic. The number of long hedge fund positions advanced by 5 in recent months. Our calculations also showed that TPR isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s view the latest hedge fund action surrounding Tapestry, Inc. (NYSE:TPR).
What have hedge funds been doing with Tapestry, Inc. (NYSE:TPR)?
At Q4’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from the second quarter of 2018. On the other hand, there were a total of 28 hedge funds with a bullish position in TPR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Tapestry, Inc. (NYSE:TPR), with a stake worth $107.3 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $64.2 million. Arrowstreet Capital, Two Sigma Advisors, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds have jumped into Tapestry, Inc. (NYSE:TPR) headfirst. Scopus Asset Management, managed by Alexander Mitchell, created the most valuable call position in Tapestry, Inc. (NYSE:TPR). Scopus Asset Management had $16.9 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also made a $7.4 million investment in the stock during the quarter. The other funds with new positions in the stock are David Costen Haley’s HBK Investments, Ward Davis and Brian Agnew’s Caerus Global Investors, and Ian Simm’s Impax Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Tapestry, Inc. (NYSE:TPR). We will take a look at Jack Henry & Associates, Inc. (NASDAQ:JKHY), Braskem SA (NYSE:BAK), Kansas City Southern (NYSE:KSU), and WestRock Company (NYSE:WRK). This group of stocks’ market values are similar to TPR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JKHY | 21 | 197585 | 7 |
| BAK | 9 | 312108 | -4 |
| KSU | 20 | 371136 | -4 |
| WRK | 29 | 453752 | -4 |
| Average | 19.75 | 333645 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $334 million. That figure was $579 million in TPR’s case. WestRock Company (NYSE:WRK) is the most popular stock in this table. On the other hand Braskem SA (NYSE:BAK) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Tapestry, Inc. (NYSE:TPR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately TPR wasn’t in this group. Hedge funds that bet on TPR were disappointed as the stock lost 3.6% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
