Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Deckers Outdoor Corp (NASDAQ:DECK).
Is DECK a good stock to buy? Deckers Outdoor Corp (NASDAQ:DECK) investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. Deckers Outdoor Corp (NASDAQ:DECK) was in 40 hedge funds’ portfolios at the end of March. The all time high for this statistic is 54. There were 45 hedge funds in our database with DECK positions at the end of the fourth quarter. Our calculations also showed that DECK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think DECK Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in DECK a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Steadfast Capital Management was the largest shareholder of Deckers Outdoor Corp (NASDAQ:DECK), with a stake worth $254.7 million reported as of the end of March. Trailing Steadfast Capital Management was Arrowstreet Capital, which amassed a stake valued at $93.5 million. AQR Capital Management, Melvin Capital Management, and Woodson Capital Management 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 59 North Capital allocated the biggest weight to Deckers Outdoor Corp (NASDAQ:DECK), around 12.51% of its 13F portfolio. One01 Capital is also relatively very bullish on the stock, earmarking 7.99 percent of its 13F equity portfolio to DECK.
Since Deckers Outdoor Corp (NASDAQ:DECK) has experienced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of funds that elected to cut their entire stakes last quarter. It’s worth mentioning that Daniel Sundheim’s D1 Capital Partners sold off the largest stake of the “upper crust” of funds followed by Insider Monkey, worth an estimated $204.8 million in stock. Philippe Laffont’s fund, Coatue Management, also sold off its stock, about $101.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 5 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Deckers Outdoor Corp (NASDAQ:DECK) but similarly valued. We will take a look at Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), First Solar, Inc. (NASDAQ:FSLR), Pegasystems Inc. (NASDAQ:PEGA), Companhia Siderurgica Nacional (NYSE:SID), WEX Inc (NYSE:WEX), NRG Energy Inc (NYSE:NRG), and Under Armour Inc (NYSE:UA). This group of stocks’ market caps are closest to DECK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JAZZ | 37 | 1260492 | 8 |
| FSLR | 24 | 304351 | -10 |
| PEGA | 35 | 1728264 | 3 |
| SID | 10 | 60938 | 1 |
| WEX | 26 | 538269 | 0 |
| NRG | 35 | 1606143 | 4 |
| UA | 51 | 1910459 | 4 |
| Average | 31.1 | 1058417 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1058 million. That figure was $922 million in DECK’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 10 bullish hedge fund positions. Deckers Outdoor Corp (NASDAQ:DECK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DECK is 58.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on DECK as the stock returned 15.2% since the end of Q1 (through 6/25) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
