Is The Buckle, Inc. (NYSE:BKE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is The Buckle, Inc. (NYSE:BKE) the right pick for your portfolio? Money managers are reducing their bets on the stock. The number of long hedge fund positions went down by 2 recently. Our calculations also showed that BKE isn't among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's go over the latest hedge fund action regarding The Buckle, Inc. (NYSE:BKE).
Hedge fund activity in The Buckle, Inc. (NYSE:BKE)
At Q4's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards BKE over the last 14 quarters. So, let's see 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, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in The Buckle, Inc. (NYSE:BKE). Citadel Investment Group has a $6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $5.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish contain Chuck Royce's Royce & Associates, Eric Sprott's Sprott Asset Management and John Overdeck and David Siegel's Two Sigma Advisors.
Since The Buckle, Inc. (NYSE:BKE) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of money managers that slashed their entire stakes last quarter. Interestingly, Sander Gerber's Hudson Bay Capital Management sold off the largest position of the "upper crust" of funds tracked by Insider Monkey, valued at an estimated $2.2 million in stock. Joel Greenblatt's fund, Gotham Asset Management, also said goodbye to its stock, about $0.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as The Buckle, Inc. (NYSE:BKE) but similarly valued. These stocks are Clovis Oncology Inc (NASDAQ:CLVS), MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI), Tennant Company (NYSE:TNC), and InflaRx N.V. (NASDAQ:IFRX). This group of stocks' market caps are similar to BKE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLVS,24,452155,-8 MTSI,15,108054,5 TNC,10,62023,-1 IFRX,13,327409,-1 Average,15.5,237410,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $237 million. That figure was $31 million in BKE's case. Clovis Oncology Inc (NASDAQ:CLVS) is the most popular stock in this table. On the other hand Tennant Company (NYSE:TNC) is the least popular one with only 10 bullish hedge fund positions. The Buckle, Inc. (NYSE:BKE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BKE wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); BKE investors were disappointed as the stock returned -0.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.