In this article we will analyze whether Weyco Group, Inc. (NASDAQ:WEYS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is Weyco Group, Inc. (NASDAQ:WEYS) a buy right now? Prominent investors were becoming less hopeful. The number of long hedge fund bets fell by 1 in recent months. Weyco Group, Inc. (NASDAQ:WEYS) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. Our calculations also showed that WEYS isn't among the 30 most popular stocks among hedge funds (click for Q3 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 today’s marketplace there are a large number of signals stock market investors employ to analyze stocks. A duo of the most useful signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best money managers can outperform their index-focused peers by a very impressive amount (see the details here).
Chuck Royce of Royce & Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to analyze the recent hedge fund action encompassing Weyco Group, Inc. (NASDAQ:WEYS).
How have hedgies been trading Weyco Group, Inc. (NASDAQ:WEYS)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the second quarter of 2020. On the other hand, there were a total of 4 hedge funds with a bullish position in WEYS a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Weyco Group, Inc. (NASDAQ:WEYS). Royce & Associates has a $1.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, founded by Jim Simons, which holds a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Weyco Group, Inc. (NASDAQ:WEYS), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0011 percent of its 13F equity portfolio to WEYS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Invenomic Capital Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified WEYS as a viable investment and initiated a position in the stock.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Weyco Group, Inc. (NASDAQ:WEYS) but similarly valued. These stocks are Aptinyx Inc. (NASDAQ:APTX), Premier Financial Bancorp, Inc. (NASDAQ:PFBI), CTI Biopharma Corp. (NASDAQ:CTIC), Montage Resources Corp (NYSE:MR), Lakeland Industries, Inc. (NASDAQ:LAKE), InnerWorkings, Inc. (NASDAQ:INWK), and Consolidated Water Co. Ltd. (NASDAQ:CWCO). All of these stocks' market caps match WEYS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APTX,7,36093,-1 PFBI,4,3181,2 CTIC,6,48701,-3 MR,14,15153,3 LAKE,12,29681,-2 INWK,14,14937,1 CWCO,8,12141,-1 Average,9.3,22841,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.3 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $3 million in WEYS's case. Montage Resources Corp (NYSE:MR) is the most popular stock in this table. On the other hand Premier Financial Bancorp, Inc. (NASDAQ:PFBI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Weyco Group, Inc. (NASDAQ:WEYS) is even less popular than PFBI. Our overall hedge fund sentiment score for WEYS is 26.5. 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. Hedge funds clearly dropped the ball on WEYS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on WEYS as the stock returned 9.5% since Q3 (through November 23rd) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.