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

To the average investor, there are many indicators market participants can use to watch Mr. Market. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the broader indices by a healthy margin (see just how much).

Equally as crucial, positive insider trading activity is another way to look at the financial markets. Just as you’d expect, there are lots of motivations for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers understand what to do (learn more here).

Now that that’s out of the way, let’s analyze the latest info about Skechers USA Inc (NYSE:SKX).

Hedge fund activity in Skechers USA Inc (NYSE:SKX)

At Q2’s end, a total of 18 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.

According to our 13F database, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Skechers USA Inc (NYSE:SKX). Pzena Investment Management has a $20.8 million position in the stock, comprising 0.1% of its 13F portfolio. On Pzena Investment Management’s heels is Alexander Mitchell of Scopus Asset Management, with a $19.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Chuck Royce’s Royce & Associates, Malcolm Fairbairn’s Ascend Capital and D. E. Shaw’s D E Shaw.

Since Skechers USA Inc (NYSE:SKX) has witnessed declining interest from the smart money’s best and brightest, it’s easy to see that there exists a select few hedgies that decided to sell off their full holdings last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management sold off the largest position of the “upper crust” of funds we monitor, worth about $1.8 million in stock, and David Costen Haley of HBK Investments was right behind this move, as the fund dumped about $1.3 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

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

Insider buying made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Skechers USA Inc (NYSE:SKX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators 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.

Using the returns explained by Insider Monkey’s tactics, average investors should always keep one eye on hedge fund and insider trading sentiment, and Skechers USA Inc (NYSE:SKX) is an important part of this process.

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