Is Skechers USA Inc (SKX) Going to Burn These Hedge Funds?

Skechers USA Inc (NYSE:SKX) was in 18 hedge funds’ portfolio at the end of March. SKX has seen a decrease in support from the world’s most elite money managers in recent months. There were 20 hedge funds in our database with SKX positions at the end of the previous quarter.

In the financial world, there are many gauges market participants can use to track the equity markets. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outclass the broader indices by a healthy amount (see just how much).

Equally as key, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are a variety of motivations for an insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if you understand what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the key action encompassing Skechers USA Inc (NYSE:SKX).

What have hedge funds been doing with Skechers USA Inc (NYSE:SKX)?

At Q1’s end, a total of 18 of the hedge funds we track held long positions in this stock, a change of -10% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Steven Cohen’s SAC Capital Advisors had the most valuable position in Skechers USA Inc (NYSE:SKX), worth close to $34.4 million, comprising 0.2% of its total 13F portfolio. On SAC Capital Advisors’s heels is Richard S. Pzena of Pzena Investment Management, with a $18.8 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Chuck Royce’s Royce & Associates, Alexander Mitchell’s Scopus Asset Management and D. E. Shaw’s D E Shaw.

Since Skechers USA Inc (NYSE:SKX) has experienced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of fund managers that decided to sell off their positions entirely at the end of the first quarter. At the top of the heap, David Keidan’s Buckingham Capital Management cut the biggest stake of the “upper crust” of funds we track, worth close to $22.2 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund sold off about $3.2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds at the end of the first quarter.

How have insiders been trading Skechers USA Inc (NYSE:SKX)?

Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past half-year. Over the last 180-day time period, Skechers USA Inc (NYSE:SKX) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Skechers USA Inc (NYSE:SKX). These stocks are Steven Madden, Ltd. (NASDAQ:SHOO), Iconix Brand Group Inc (NASDAQ:ICON), Tumi Holdings Inc (NYSE:TUMI), Crocs, Inc. (NASDAQ:CROX), and Vera Bradley, Inc. (NASDAQ:VRA). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps are closest to SKX’s market cap.

With the results shown by our strategies, everyday investors should always watch hedge fund and insider trading activity, and Skechers USA Inc (NYSE:SKX) is no exception.

Click here to learn why you should track hedge funds