Is Caleres Inc (CAL) Going to Burn These Hedge Funds?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Caleres Inc (NYSE:CAL).

Caleres Inc (NYSE:CAL) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as FibroGen Inc (NASDAQ:FGEN), Halyard Health Inc (NYSE:HYH), and Hub Group Inc (NASDAQ:HUBG) to gather more data points.

To the average investor, there are a large number of indicators stock market investors employ to assess publicly traded companies. A pair of the less utilized indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can trounce the market by a solid margin (see the details here).

Now, let’s take a look at the fresh action regarding Caleres Inc (NYSE:CAL).

How have hedgies been trading Caleres Inc (NYSE:CAL)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Alexander Mitchell’s Scopus Asset Management has the biggest position in Caleres Inc (NYSE:CAL), worth close to $21.2 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Gotham Asset Management, managed by Joel Greenblatt, which holds a $13.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism comprise Ken Griffin’s Citadel Investment Group, Dmitry Balyasny’s Balyasny Asset Management, and Larry Foley and Paul Farrell’s Bronson Point Partners.

Since Caleres Inc (NYSE:CAL) has faced a bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of hedge funds that elected to cut their entire stakes in the third quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors sold off the largest position of all the hedgies monitored by Insider Monkey, totaling an estimated $2.5 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.5 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Caleres Inc (NYSE:CAL) but similarly valued. We will take a look at FibroGen Inc (NASDAQ:FGEN), Halyard Health Inc (NYSE:HYH), Hub Group Inc (NASDAQ:HUBG), and MannKind Corporation (NASDAQ:MNKD). This group of stocks’ market caps is closest to Caleres Inc (NYSE:CAL)’s market cap.

As you can see, these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $73 million in Caleres Inc (NYSE:CAL)’s case. FibroGen Inc (NASDAQ:FGEN) is the most popular stock in this table. On the other hand, MannKind Corporation (NASDAQ:MNKD) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, Caleres Inc (NYSE:CAL) 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.