In this article we will take a look at whether hedge funds think Deckers Outdoor Corp (NYSE:DECK) is 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, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Deckers Outdoor Corp (NYSE:DECK) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Deckers Outdoor Corp (NYSE:DECK) was in 48 hedge funds’ portfolios at the end of September. The all time high for this statistic is 54. There were 44 hedge funds in our database with DECK holdings at the end of June. Our calculations also showed that DECK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to analyze the latest hedge fund action encompassing Deckers Outdoor Corp (NYSE:DECK).
David Brown of Hawk Ridge Management
Do Hedge Funds Think DECK Is A Good Stock To Buy Now?
At third quarter’s end, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DECK over the last 25 quarters. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Steadfast Capital Management, managed by Robert Pitts, holds the number one position in Deckers Outdoor Corp (NYSE:DECK). Steadfast Capital Management has a $297.3 million position in the stock, comprising 2.9% of its 13F portfolio. On Steadfast Capital Management’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $169.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Other peers with similar optimism contain Gavin Baker’s Atreides Management, James Parsons’s Junto Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position 59 North Capital allocated the biggest weight to Deckers Outdoor Corp (NYSE:DECK), around 17.87% of its 13F portfolio. One01 Capital is also relatively very bullish on the stock, earmarking 7.69 percent of its 13F equity portfolio to DECK.
As one would reasonably expect, some big names were breaking ground themselves. Scopus Asset Management, managed by Alexander Mitchell, assembled the most outsized position in Deckers Outdoor Corp (NYSE:DECK). Scopus Asset Management had $27 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $26 million position during the quarter. The following funds were also among the new DECK investors: David Brown’s Hawk Ridge Management, Alexander Mitchell’s Scopus Asset Management, and Jinghua Yan’s TwinBeech Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Deckers Outdoor Corp (NYSE:DECK) but similarly valued. We will take a look at Five Below Inc (NASDAQ:FIVE), Cleveland-Cliffs Inc (NYSE:CLF), Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), Guidewire Software Inc (NYSE:GWRE), Hill-Rom Holdings, Inc. (NYSE:HRC), Intellia Therapeutics, Inc. (NASDAQ:NTLA), and Levi Strauss & Co. (NYSE:LEVI). This group of stocks’ market caps are closest to DECK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIVE | 40 | 996155 | -2 |
| CLF | 35 | 682055 | -9 |
| NCLH | 36 | 502017 | -7 |
| GWRE | 26 | 2005849 | -1 |
| HRC | 46 | 1410210 | 24 |
| NTLA | 37 | 1620289 | -4 |
| LEVI | 26 | 225120 | -4 |
| Average | 35.1 | 1063099 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.1 hedge funds with bullish positions and the average amount invested in these stocks was $1063 million. That figure was $1213 million in DECK’s case. Hill-Rom Holdings, Inc. (NYSE:HRC) is the most popular stock in this table. On the other hand Guidewire Software Inc (NYSE:GWRE) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Deckers Outdoor Corp (NYSE:DECK) is more popular among hedge funds. Our overall hedge fund sentiment score for DECK is 85.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on DECK as the stock returned 12.5% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
