Is Hibbett Sports, Inc. (HIBB) A Good Stock To Buy?

Is Hibbett Sports, Inc. (NASDAQ:HIBB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment moves of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Hibbett Sports, Inc. (NASDAQ:HIBB) has experienced a decrease in enthusiasm from smart money of late. HIBB was in 9 hedge funds’ portfolios at the end of the first quarter of 2016. There were 18 hedge funds in our database with HIBB positions at the end of the previous quarter. So, overall hedge funds seem to lose interest on Hibbert Sports. 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 Central Garden & Pet Co (NASDAQ:CENT), Merit Medical Systems, Inc. (NASDAQ:MMSI), and Barracuda Networks Inc (NYSE:CUDA) to gather more data points.

Hibbert Sports had an uneventful first quarter. Here is how Patrick McKeever from MKM Partners interpretted HIBB’s first quarter earnings release:

“Same-store sales were a little light of our forecast and the Street estimate, but comps were positive and better than many retailers as footwear performed well and as apparel saw some improvement. EPS increased 12%, though a good portion of the growth came from stock buybacks. Operating income increased only 1%, held back in part by planned investment spending on omni-channel capabilities. Gross margin saw a decent gain, but we believe much of the increase was from vendor support.”

McKeever is neutral on HIBB at the moment. Now, we’re going to take a gander at the new action surrounding Hibbett Sports, Inc. (NASDAQ:HIBB).

Hedge fund activity in Hibbett Sports, Inc. (NASDAQ:HIBB)

Heading into the second quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, AlphaOne Capital Partners, managed by Paul Hondros, holds the largest position in Hibbett Sports, Inc. (NASDAQ:HIBB). AlphaOne Capital Partners has a $2.9 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $2.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions contain Joel Greenblatt’s Gotham Asset Management, Adam Wright and Gary Kohler’s Blue Clay Capital and D. E. Shaw’s D E Shaw.

Due to the fact that Hibbett Sports, Inc. (NASDAQ:HIBB) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds who sold off their positions entirely last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the largest investment of the “upper crust” of funds watched by Insider Monkey, comprising close to $9.2 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $5.9 million worth. These moves are interesting, as total hedge fund interest fell by 9 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hibbett Sports, Inc. (NASDAQ:HIBB) but similarly valued. These stocks are Central Garden & Pet Co (NASDAQ:CENT), Merit Medical Systems, Inc. (NASDAQ:MMSI), Barracuda Networks Inc (NYSE:CUDA), and Genomic Health, Inc. (NASDAQ:GHDX). All of these stocks’ market caps are closest to HIBB’s market cap.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was $12 million in HIBB’s case. Central Garden & Pet Co (NASDAQ:CENT) is the most popular stock in this table. On the other hand Barracuda Networks Inc (NYSE:CUDA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Hibbett Sports, Inc. (NASDAQ:HIBB) is even less popular than CUDA. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.