What Smart Money Thinks about Caleres Inc (CAL)?

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Caleres Inc (NYSE:CAL).

Is Caleres Inc (NYSE:CAL) a healthy stock for your portfolio? The smart money seems to be taking a pessimistic view, as the number of long hedge fund positions that are disclosed in regulatory 13F filings contracted by four during the third quarter. In this way, the company was included in the 13F portfolios of 17 funds tracked by Insider Monkey at the end of September. At the end of this article we will also compare CAL to other stocks including Tree.com Inc (NASDAQ:TREE), GasLog Ltd (NYSE:GLOG), and Benchmark Electronics, Inc. (NYSE:BHE) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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With all of this in mind, let’s go over the fresh action surrounding Caleres Inc (NYSE:CAL).

How are hedge funds trading Caleres Inc (NYSE:CAL)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, down by 19% from the end of the second quarter. Below, you can check out the change in hedge fund sentiment towards CAL over the last five quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in Caleres Inc (NYSE:CAL), worth close to $25.7 million, amounting to 0.2% of its total 13F portfolio. The second most bullish fund manager is D. E. Shaw’s D E Shaw holding a $4.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions contain Steven Tananbaum’s GoldenTree Asset Management, Steve Cohen’s Point72 Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually got rid of their positions entirely. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP got rid of the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $2.4 million in stock, and Neil Chriss’ Hutchin Hill Capital was right behind this move, as the fund dumped about $1.4 million worth of shares.

Let’s check out hedge fund activity in other stocks similar to Caleres Inc (NYSE:CAL). We will take a look at Tree.com Inc (NASDAQ:TREE), GasLog Ltd (NYSE:GLOG), Benchmark Electronics, Inc. (NYSE:BHE), and Cato Corp (NYSE:CATO). All of these stocks’ market caps resemble CAL’s market cap.

As you can see these stocks had an average of 14 investors with bullish positions and the average amount invested in these stocks was $98 million, versus $55 million in CAL’s case. Tree.com Inc (NASDAQ:TREE) is the most popular stock in this table, while GasLog Ltd (NYSE:GLOG) is the least popular one with only nine bullish hedge fund positions. Caleres Inc (NYSE:CAL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Tree.com Inc (NASDAQ:TREE) might be a better candidate to consider taking a long position in.