Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 15 S&P 500 stocks among hedge funds at the end of September 2018 returned an average of 1% through March 15th whereas the S&P 500 Index ETF lost 2.2% during the same period. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Crocs, Inc. (NASDAQ:CROX) from the perspective of those elite funds.
Crocs, Inc. (NASDAQ:CROX) has experienced a decrease in activity from the world’s largest hedge funds lately. Our calculations also showed that CROX 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 view the latest hedge fund action surrounding Crocs, Inc. (NASDAQ:CROX).
What have hedge funds been doing with Crocs, Inc. (NASDAQ:CROX)?
At Q4’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CROX over the last 14 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, managed by Jim Simons, holds the number one position in Crocs, Inc. (NASDAQ:CROX). Renaissance Technologies has a $96.8 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, led by D. E. Shaw, holding a $39.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions contain John Overdeck and David Siegel’s Two Sigma Advisors, Richard Driehaus’s Driehaus Capital and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Due to the fact that Crocs, Inc. (NASDAQ:CROX) has witnessed falling interest from hedge fund managers, we can see that there was a specific group of money managers who sold off their entire stakes heading into Q3. It’s worth mentioning that James Woodson Davis’s Woodson Capital Management said goodbye to the largest position of the 700 funds watched by Insider Monkey, comprising about $7.6 million in stock. Jeffrey Talpins’s fund, Element Capital Management, also said goodbye to its stock, about $4.9 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to Crocs, Inc. (NASDAQ:CROX). We will take a look at Realogy Holdings Corp (NYSE:RLGY), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), and Kayne Anderson MLP/Midstream Investment Company (NYSE:KYN). All of these stocks’ market caps match CROX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RLGY | 20 | 445074 | -3 |
| MDGL | 19 | 287555 | -7 |
| NTB | 16 | 114434 | 0 |
| KYN | 4 | 5651 | 1 |
| Average | 14.75 | 213179 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $341 million in CROX’s case. Realogy Holdings Corp (NYSE:RLGY) is the most popular stock in this table. On the other hand Kayne Anderson MLP/Midstream Investment Company (NYSE:KYN) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Crocs, Inc. (NASDAQ:CROX) is more popular among hedge funds. 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. Unfortunately CROX wasn’t nearly as popular as these 15 stock and hedge funds that were betting on CROX were disappointed as the stock returned 4.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
