Is CROX Stock A Buy or Sell?

The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Crocs, Inc. (NASDAQ:CROX).

Is CROX stock a buy or sell? Crocs, Inc. (NASDAQ:CROX) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Crocs, Inc. (NASDAQ:CROX) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 35 hedge funds in our database with CROX holdings at the end of September. Our calculations also showed that CROX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Bernard Horn of Polaris Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to take a glance at the new hedge fund action surrounding Crocs, Inc. (NASDAQ:CROX).

Do Hedge Funds Think CROX Is A Good Stock To Buy Now?

At the end of December, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in CROX a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Crocs, Inc. (NASDAQ:CROX), which was worth $86.2 million at the end of the fourth quarter. On the second spot was Woodson Capital Management which amassed $58.9 million worth of shares. Citadel Investment Group, Polaris Capital Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Woodson Capital Management allocated the biggest weight to Crocs, Inc. (NASDAQ:CROX), around 3.83% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 2.11 percent of its 13F equity portfolio to CROX.

Now, key hedge funds have been driving this bullishness. Maverick Capital, managed by Lee Ainslie, assembled the biggest position in Crocs, Inc. (NASDAQ:CROX). Maverick Capital had $6.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $5.2 million position during the quarter. The following funds were also among the new CROX investors: Brad Farber’s Atika Capital, Michael Gelband’s ExodusPoint Capital, and Sander Gerber’s Hudson Bay Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Crocs, Inc. (NASDAQ:CROX) but similarly valued. We will take a look at TechnipFMC plc (NYSE:FTI), Neogen Corporation (NASDAQ:NEOG), Foot Locker, Inc. (NYSE:FL), Upwork Inc. (NASDAQ:UPWK), Tenet Healthcare Corp (NYSE:THC), United Bankshares, Inc. (NASDAQ:UBSI), and Clean Harbors Inc (NYSE:CLH). This group of stocks’ market values are similar to CROX’s market value.

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As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $503 million. That figure was $621 million in CROX’s case. TechnipFMC plc (NYSE:FTI) is the most popular stock in this table. On the other hand United Bankshares, Inc. (NASDAQ:UBSI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Crocs, Inc. (NASDAQ:CROX) is more popular among hedge funds. Our overall hedge fund sentiment score for CROX is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on CROX as the stock returned 23.2% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

Disclosure: None. This article was originally published at Insider Monkey.