Deckers Outdoor Corp (DECK): Are Hedge Funds Right About This Stock?

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Deckers Outdoor Corp (NASDAQ:DECK) was in 30 hedge funds’ portfolio at the end of the first quarter of 2013. DECK has experienced an increase in hedge fund sentiment lately. There were 28 hedge funds in our database with DECK positions at the end of the previous quarter.

In the eyes of most investors, hedge funds are seen as underperforming, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by keeping an eye on their best stock picks, we have unsheathed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as integral, positive insider trading sentiment is another way to parse down the marketplace. There are plenty of incentives for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).

Now, we’re going to take a peek at the latest action surrounding Deckers Outdoor Corp (NASDAQ:DECK).

How are hedge funds trading Deckers Outdoor Corp (NASDAQ:DECK)?

In preparation for this quarter, a total of 30 of the hedge funds we track were bullish in this stock, a change of 7% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

Deckers Outdoor Corp (NASDAQ:DECK)Of the funds we track, Patrick McCormack’s Tiger Consumer Management had the most valuable position in Deckers Outdoor Corp (NASDAQ:DECK), worth close to $82 million, comprising 3.3% of its total 13F portfolio. Coming in second is John Thiessen of Vertex One Asset Management, with a $77.1 million position; the fund has 10.6% of its 13F portfolio invested in the stock. Some other peers that are bullish include Chuck Royce’s Royce & Associates, Lee Ainslie’s Maverick Capital and Gilchrist Berg’s Water Street Capital.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Maverick Capital, managed by Lee Ainslie, initiated the most valuable position in Deckers Outdoor Corp (NASDAQ:DECK). Maverick Capital had 45.6 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $30.1 million investment in the stock during the quarter. The other funds with brand new DECK positions are Louis Bacon’s Moore Global Investments, Matthew Knauer and Mina Faltas’s Nokota Management, and Dmitry Balyasny’s Balyasny Asset Management.

What have insiders been doing with Deckers Outdoor Corp (NASDAQ:DECK)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time frame, Deckers Outdoor Corp (NASDAQ:DECK) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Deckers Outdoor Corp (NASDAQ:DECK). These stocks are Crocs, Inc. (NASDAQ:CROX), Tumi Holdings Inc (NYSE:TUMI), Wolverine World Wide, Inc. (NYSE:WWW), Iconix Brand Group Inc (NASDAQ:ICON), and Steven Madden, Ltd. (NASDAQ:SHOO). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps resemble DECK’s market cap.

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