At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Steven Madden, Ltd. (NASDAQ:SHOO) makes for a good investment right now.
Is Steven Madden, Ltd. (NASDAQ:SHOO) a buy here? The smart money was in an optimistic mood. The number of long hedge fund bets inched up by 5 in recent months. Steven Madden, Ltd. (NASDAQ:SHOO) was in 19 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that SHOO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Peter Rathjens of Arrowstreet Capital
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Do Hedge Funds Think SHOO Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in SHOO over the last 23 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Scopus Asset Management held the most valuable stake in Steven Madden, Ltd. (NASDAQ:SHOO), which was worth $61.5 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $29.1 million worth of shares. Balyasny Asset Management, Arrowstreet Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Scopus Asset Management allocated the biggest weight to Steven Madden, Ltd. (NASDAQ:SHOO), around 0.77% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, dishing out 0.09 percent of its 13F equity portfolio to SHOO.
As industrywide interest jumped, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in Steven Madden, Ltd. (NASDAQ:SHOO). Balyasny Asset Management had $17.4 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $2.4 million investment in the stock during the quarter. The other funds with brand new SHOO positions are Paul Marshall and Ian Wace's Marshall Wace LLP, Renaissance Technologies, and Noam Gottesman's GLG Partners.
Let's also examine hedge fund activity in other stocks similar to Steven Madden, Ltd. (NASDAQ:SHOO). We will take a look at Pacira Biosciences Inc (NASDAQ:PCRX), Antero Resources Corp (NYSE:AR), Acushnet Holdings Corp. (NYSE:GOLF), Alamos Gold Inc (NYSE:AGI), Cardlytics, Inc. (NASDAQ:CDLX), Corsair Gaming, Inc. (NASDAQ:CRSR), and Clover Health Investments, Corp. (NASDAQ:CLOV). All of these stocks' market caps are similar to SHOO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PCRX,20,547351,0 AR,33,609879,2 GOLF,19,40986,6 AGI,22,267948,5 CDLX,38,1012610,6 CRSR,9,22426,-3 CLOV,23,822813,23 Average,23.4,474859,5.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $475 million. That figure was $141 million in SHOO's case. Cardlytics, Inc. (NASDAQ:CDLX) is the most popular stock in this table. On the other hand Corsair Gaming, Inc. (NASDAQ:CRSR) is the least popular one with only 9 bullish hedge fund positions. Steven Madden, Ltd. (NASDAQ:SHOO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SHOO is 52. 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. 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 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 gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately SHOO wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SHOO investors were disappointed as the stock returned 8% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.