Macy’s, Walmart: Hedge Funds Are Bullish On These 5 Retailers

#3. Macy’s Inc (NYSE:M)

– Number of Hedge Fund Shareholders (as of June 30): 57

– Total Value of Hedge Funds’ Holdings (as of June 30): $1.14 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 11%

The number of funds with long exposure to Macy’s Inc (NYSE:M) inched up by two to 57 during the second quarter. Particularly bullish was Clint Carlson’s Carlson Capital, which boosted its stake by 547% over the period, to 2.08 million shares worth almost $70 million. Jeffrey Smith’s Starboard Value was also a fan of the clothing retailer, holding 2.36 million shares in it on June 30.

Even though Macy’s Inc (NYSE:M) has gained almost 6.5% since the end of the second quarter, its valuation of roughly 14-times trailing earnings is relatively par for the course in relation to many of its peers. Nonetheless, the stock carries a 4.26% annualized dividend yield, above its industry’s average. Shares of Macy’s fell by 1.44% on Friday, likely driven by the news that the company is considering an expansion of its partnership with Starbucks Corporation (NASDAQ:SBUX), which currently has locations at 49 of the retailer’s stores.

#2. Wal-Mart Stores, Inc. (NYSE:WMT)

– Number of Hedge Fund Shareholders (as of June 30): 58

– Total Value of Hedge Funds’ Holdings (as of June 30): $6.86 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 3%

After a 7.4% increase in hedge fund support, Wal-Mart Stores, Inc. (NYSE:WMT) counted 58 backers in our database, holding almost $7 billion worth of its stock. Newcomers included Gabriel Plotkin’s Melvin Capital Management, which acquired 1.05 million shares or $76.6 million in stock in the second quarter, and Dmitry Balyasny’s Balyasny Asset Management, which bought 1.02 million shares between April and June.

Shares of Wal-Mart Stores, Inc. (NYSE:WMT), the number one retailer in the U.S., have spiked by more than 14.6% since the beginning of the year, but have lost almost 3% in the third quarter. Included in that was a 2.08% decline on Friday, after the company announced that it would stop selling Egyptian cotton sheets made by Welspun India, and offer customers that had already purchased them a full refund, after an investigation found that Welspun could not assure the products’ legitimacy. Target Corporation (NYSE:TGT) also announced in August that it was removing Welspun products from its stores and cutting ties with the company.

#1. Dollar Tree, Inc. (NASDAQ:DLTR)

– Number of Hedge Fund Shareholders (as of June 30): 64

– Total Value of Hedge Funds’ Holdings (as of June 30): $4.95 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 22.3%

Dollar Tree, Inc. (NASDAQ:DLTR) was the most popular brick-and-mortar retailer among the funds that we track, with 64 funds in our database holding 22.3% of its stock as of June 30. Notable investors included Charles Akre’s Akre Capital Management, with 4.18 million shares worth $403.1 million, and Ken Griffin’s Citadel Advisors, which held 2.42 million shares after boosting the size of its holding by 52% during the second quarter.

Over the second quarter, Dollar Tree, Inc. (NASDAQ:DLTR) gained more than 13.25%, even though its first quarter results missed expectations on the revenue front. The third quarter, however, saw it give up those gains, as it has tumbled by 13.55% due to a top- and bottom-line miss with its second quarter results. EPS of $0.72 and revenue of $5 billion missed the Street’s consensus marks by $0.01 and $90 million, respectively, with the discount retailer potentially having been impacted by a reduction in food stamp coverage in some states.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned in this article.