World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Canada Goose Holdings Inc. (NYSE:GOOS) investors should be aware of an increase in hedge fund sentiment in recent months. Our calculations also showed that goos 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.
We’re going to review the latest hedge fund action surrounding Canada Goose Holdings Inc. (NYSE:GOOS).
How have hedgies been trading Canada Goose Holdings Inc. (NYSE:GOOS)?
At Q4’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 61% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in GOOS a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Canada Goose Holdings Inc. (NYSE:GOOS) was held by Key Square Capital Management, which reported holding $39.3 million worth of stock at the end of September. It was followed by Laurion Capital Management with a $34.3 million position. Other investors bullish on the company included Tairen Capital, McKinley Capital Management, and Driehaus Capital.
As one would reasonably expect, specific money managers have jumped into Canada Goose Holdings Inc. (NYSE:GOOS) headfirst. Key Square Capital Management, managed by Scott Bessent, initiated the most valuable position in Canada Goose Holdings Inc. (NYSE:GOOS). Key Square Capital Management had $39.3 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $34.3 million investment in the stock during the quarter. The following funds were also among the new GOOS investors: Larry Chen and Terry Zhang’s Tairen Capital, Mike Ogborne’s Ogborne Capital, and Steve Cohen’s Point72 Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Canada Goose Holdings Inc. (NYSE:GOOS) but similarly valued. These stocks are Five9 Inc (NASDAQ:FIVN), Navistar International Corp (NYSE:NAV), Texas Capital Bancshares Inc (NASDAQ:TCBI), and Sinclair Broadcast Group, Inc. (NASDAQ:SBGI). This group of stocks’ market caps are closest to GOOS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIVN | 28 | 469162 | 3 |
| NAV | 20 | 1055321 | -6 |
| TCBI | 26 | 241493 | 4 |
| SBGI | 33 | 378016 | 2 |
| Average | 26.75 | 535998 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $536 million. That figure was $175 million in GOOS’s case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand Navistar International Corp (NYSE:NAV) is the least popular one with only 20 bullish hedge fund positions. Canada Goose Holdings Inc. (NYSE:GOOS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on GOOS, though not to the same extent, as the stock returned 18.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
