Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Deckers Outdoor Corp (NYSE:DECK) based on that data.
Deckers Outdoor Corp (NYSE:DECK) investors should pay attention to a decrease in enthusiasm from smart money lately. Our calculations also showed that DECK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are perceived as unimportant, outdated financial vehicles of the past. While there are more than 8000 funds in operation today, Our researchers look at the masters of this club, approximately 850 funds. These money managers manage most of the hedge fund industry's total capital, and by shadowing their first-class stock picks, Insider Monkey has unearthed a few investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_26388" align="aligncenter" width="394"] Lee Ainslie of Maverick Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a look at the key hedge fund action encompassing Deckers Outdoor Corp (NYSE:DECK).
What does smart money think about Deckers Outdoor Corp (NYSE:DECK)?
At the end of the first quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -28% from the fourth quarter of 2019. On the other hand, there were a total of 29 hedge funds with a bullish position in DECK a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Deckers Outdoor Corp (NYSE:DECK) was held by Samlyn Capital, which reported holding $90.5 million worth of stock at the end of September. It was followed by Melvin Capital Management with a $90.5 million position. Other investors bullish on the company included AQR Capital Management, Woodson Capital Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Woodson Capital Management allocated the biggest weight to Deckers Outdoor Corp (NYSE:DECK), around 7.61% of its 13F portfolio. Miura Global Management is also relatively very bullish on the stock, setting aside 7.46 percent of its 13F equity portfolio to DECK.
Because Deckers Outdoor Corp (NYSE:DECK) has witnessed a decline in interest from hedge fund managers, it's safe to say that there was a specific group of funds that decided to sell off their entire stakes last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the largest investment of the 750 funds followed by Insider Monkey, worth close to $28.4 million in stock. Louis Bacon's fund, Moore Global Investments, also dropped its stock, about $12.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 12 funds last quarter.
Let's go over 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 Vir Biotechnology, Inc. (NASDAQ:VIR), Jabil Inc. (NYSE:JBL), Ritchie Bros. Auctioneers Incorporated (NYSE:RBA), and GrubHub Inc (NYSE:GRUB). This group of stocks' market caps are closest to DECK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VIR,4,17427,2 JBL,20,252649,-14 RBA,14,178380,-7 GRUB,32,373032,-1 Average,17.5,205372,-5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $554 million in DECK's case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Vir Biotechnology, Inc. (NASDAQ:VIR) is the least popular one with only 4 bullish hedge fund positions. Deckers Outdoor Corp (NYSE:DECK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on DECK as the stock returned 36.2% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.