The market has been volatile as the Federal Reserve continues its rate hikes to normalize the interest rates. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by about 4 percentage points through November 16th. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Shoe Carnival, Inc. (NASDAQ:SCVL) and find out how it is affected by hedge funds’ moves.
Shoe Carnival, Inc. (NASDAQ:SCVL) was in 15 hedge funds’ portfolios at the end of the third quarter of 2018. SCVL has seen an increase in hedge fund interest of late. There were 14 hedge funds in our database with SCVL positions at the end of the previous quarter. Our calculations also showed that scvl isn’t among the 30 most popular stocks among hedge funds.
In today’s marketplace there are a lot of gauges investors put to use to evaluate stocks. Some of the less known gauges are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the S&P 500 by a healthy margin (see the details here).
We’re going to review the recent hedge fund action encompassing Shoe Carnival, Inc. (NASDAQ:SCVL).
How have hedgies been trading Shoe Carnival, Inc. (NASDAQ:SCVL)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in SCVL heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Shoe Carnival, Inc. (NASDAQ:SCVL) was held by Royce & Associates, which reported holding $25 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $10.4 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Citadel Investment Group.
As aggregate interest increased, specific money managers were leading the bulls’ herd. GLG Partners, managed by Noam Gottesman, established the biggest position in Shoe Carnival, Inc. (NASDAQ:SCVL). GLG Partners had $2.6 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0.2 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Shoe Carnival, Inc. (NASDAQ:SCVL) but similarly valued. We will take a look at Vivint Solar Inc (NYSE:VSLR), Construction Partners, Inc. (NASDAQ:ROAD), First Mid-Illinois Bancshares, Inc. (NASDAQ:FMBH), and Luxfer Holdings PLC (NYSE:LXFR). All of these stocks’ market caps are similar to SCVL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VSLR | 10 | 6399 | -3 |
| ROAD | 9 | 23723 | 0 |
| FMBH | 2 | 10246 | -2 |
| LXFR | 8 | 106599 | -4 |
| Average | 7.25 | 36742 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $75 million in SCVL’s case. Vivint Solar Inc (NYSE:VSLR) is the most popular stock in this table. On the other hand First Mid-Illinois Bancshares, Inc. (NASDAQ:FMBH) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Shoe Carnival, Inc. (NASDAQ:SCVL) 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.
Disclosure: None. This article was originally published at Insider Monkey.
