The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2019. In this article we are going to take a look at smart money sentiment towards Skechers USA Inc (NYSE:SKX).
Is Skechers USA Inc (NYSE:SKX) a marvelous investment right now? Money managers are becoming more confident. The number of long hedge fund bets rose by 3 recently. Our calculations also showed that SKX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). SKX was in 26 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with SKX holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a multitude of methods market participants employ to grade publicly traded companies. Two of the most underrated methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can trounce the broader indices by a significant amount (see the details here).
John Overdeck of Two Sigma Advisors
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a glance at the latest hedge fund action encompassing Skechers USA Inc (NYSE:SKX).
Hedge fund activity in Skechers USA Inc (NYSE:SKX)
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SKX over the last 17 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Skechers USA Inc (NYSE:SKX), with a stake worth $159.5 million reported as of the end of September. Trailing AQR Capital Management was Tremblant Capital, which amassed a stake valued at $98.3 million. Renaissance Technologies, Two Sigma Advisors, and Marshall Wace 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 Tremblant Capital allocated the biggest weight to Skechers USA Inc (NYSE:SKX), around 5.65% of its portfolio. Intrepid Capital Management is also relatively very bullish on the stock, designating 5.08 percent of its 13F equity portfolio to SKX.
Consequently, key hedge funds have been driving this bullishness. Renaissance Technologies established the biggest position in Skechers USA Inc (NYSE:SKX). Renaissance Technologies had $53 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also made a $3.9 million investment in the stock during the quarter. The following funds were also among the new SKX investors: Alexander Mitchell’s Scopus Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Steve Cohen’s Point72 Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Skechers USA Inc (NYSE:SKX) but similarly valued. These stocks are TCF Financial Corporation (NASDAQ:TCF), GDS Holdings Limited (NASDAQ:GDS), Sonoco Products Company (NYSE:SON), and CDK Global Inc (NASDAQ:CDK). This group of stocks’ market valuations are similar to SKX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCF | 28 | 359418 | 8 |
| GDS | 30 | 1126926 | 2 |
| SON | 20 | 117152 | 1 |
| CDK | 28 | 473046 | -1 |
| Average | 26.5 | 519136 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $519 million. That figure was $521 million in SKX’s case. GDS Holdings Limited (NASDAQ:GDS) is the most popular stock in this table. On the other hand Sonoco Products Company (NYSE:SON) is the least popular one with only 20 bullish hedge fund positions. Skechers USA Inc (NYSE:SKX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on SKX, though not to the same extent, as the stock returned 7.7% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
