Is Kate Spade & Co (KATE) Going to Burn These Hedge Funds?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Kate Spade & Co (NYSE:KATE) has experienced a decrease in support from the world’s most elite money managers recently. KATE was in 29 hedge funds’ portfolios at the end of September. There were 30 hedge funds in our database with KATE positions at the end of the previous quarter. At the end of this article we will also compare KATE to other stocks including Logitech International SA (USA) (NASDAQ:LOGI), UMB Financial Corporation (NASDAQ:UMBF), and GrubHub Inc (NYSE:GRUB) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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What have hedge funds been doing with Kate Spade & Co (NYSE:KATE)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 3% from the second quarter of 2016, and the third consecutive quarter in which fewer hedge funds have owned shares of KATE. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, OZ Management, managed by Daniel S. Och, holds the largest position in Kate Spade & Co (NYSE:KATE). OZ Management has a $79.3 million position in the stock. Coming in second is Alexander Mitchell of Scopus Asset Management, with a $56.8 million position. Remaining members of the smart money that are bullish consist of Ken Fisher’s Fisher Asset Management, Robert Pohly’s Samlyn Capital, and Kamyar Khajavi’s MIK Capital.