Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Wolverine World Wide, Inc. (NYSE:WWW) based on that data.
Wolverine World Wide, Inc. (NYSE:WWW) shareholders have witnessed a decrease in hedge fund interest recently. WWW was in 13 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with WWW positions at the end of the previous quarter. Our calculations also showed that WWW isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to analyze the recent hedge fund action surrounding Wolverine World Wide, Inc. (NYSE:WWW).
What does the smart money think about Wolverine World Wide, Inc. (NYSE:WWW)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WWW over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Wolverine World Wide, Inc. (NYSE:WWW), with a stake worth $48.8 million reported as of the end of September. Trailing Royce & Associates was Citadel Investment Group, which amassed a stake valued at $22 million. Marshall Wace LLP, Renaissance Technologies, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Because Wolverine World Wide, Inc. (NYSE:WWW) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of fund managers that elected to cut their entire stakes heading into Q3. It’s worth mentioning that Lee Ainslie’s Maverick Capital cut the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $3 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also said goodbye to its stock, about $2.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q3.
Let’s also examine hedge fund activity in other stocks similar to Wolverine World Wide, Inc. (NYSE:WWW). These stocks are Nexstar Media Group, Inc. (NASDAQ:NXST), RBC Bearings Incorporated (NASDAQ:ROLL), Two Harbors Investment Corp (NYSE:TWO), and Americold Realty Trust (NYSE:COLD). This group of stocks’ market valuations are closest to WWW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NXST | 37 | 894057 | 6 |
| ROLL | 7 | 60213 | -2 |
| TWO | 14 | 122041 | 0 |
| COLD | 21 | 542260 | 11 |
| Average | 19.75 | 404643 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $405 million. That figure was $124 million in WWW’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 7 bullish hedge fund positions. Wolverine World Wide, Inc. (NYSE:WWW) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NXST might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
