Movado Group, Inc (MOV): Are Hedge Funds Right to be Bullish?

Is Movado Group, Inc (NYSE:MOV) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

Movado Group, Inc (NYSE:MOV) was in 21 hedge funds’ portfolios at the end of September. MOV has seen an increase in hedge fund sentiment of late. There were 17 hedge funds in our database with MOV positions at the end of the previous quarter. At the end of this article we will also compare MOV to other stocks including Dorian LPG Ltd (NYSE:LPG), Ellington Financial LLC (NYSE:EFC), and Capella Education Company (NASDAQ:CPLA) to get a better sense of its popularity.

To the average investor there are a large number of signals shareholders have at their disposal to value their holdings. A couple of the most innovative signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best money managers can beat the broader indices by a significant margin (see the details here).

With all of this in mind, we’re going to analyze the new action surrounding Movado Group, Inc (NYSE:MOV).

How have hedgies been trading Movado Group, Inc (NYSE:MOV)?

Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 24% rise from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in Movado Group, Inc (NYSE:MOV), worth close to $63.1 million, accounting for 0.3% of its total 13F portfolio. The second-largest stake is held by Fisher Asset Management, managed by Ken Fisher, which holds a $4.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish consist of Murray Stahl’s Horizon Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Israel Englander’s Millennium Management.

As aggregate interest increased, key money managers have jumped into Movado Group, Inc (NYSE:MOV) headfirst. Millennium Management, assembled the largest position in Movado Group, Inc (NYSE:MOV). Millennium Management had $2.5 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also made a $1.2 million investment in the stock during the quarter. The following funds were also among the new MOV investors: Mike Vranos’ Ellington, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Peter Muller’s PDT Partners.

Let’s now review hedge fund activity in other stocks similar to Movado Group, Inc (NYSE:MOV). We will take a look at Dorian LPG Ltd (NYSE:LPG), Ellington Financial LLC (NYSE:EFC), Capella Education Company (NASDAQ:CPLA), and Aegion Corp (NASDAQ:AEGN). This group of stocks’ market values resemble MOV’s market value.

As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $90 million in MOV’s case. Aegion Corp (NASDAQ:AEGN) is the most popular stock in this table. On the other hand Ellington Financial LLC (NYSE:EFC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Movado Group, Inc (NYSE:MOV) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.