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Hedge Funds Are Losing Faith In Iconix Brand Group Inc (ICON)

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Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Iconix Brand Group Inc (NASDAQ:ICON) from the perspective of those successful funds.

Iconix Brand Group Inc (NASDAQ:ICON) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. 11 hedge funds that we track were long the stock on September 30. There were 15 hedge funds in our database with ICON positions on June 30. At the end of this article we will also compare ICON to other stocks including Ocwen Financial Corporation (NYSE:OCN), Boulevard Acquisition Corp II (NASDAQ:BLVD), and Catchmark Timber Trust Inc (NYSE:CTT) to get a better sense of its popularity.

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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

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What does the smart money think about Iconix Brand Group Inc (NASDAQ:ICON)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 27% drop from one quarter earlier. The graph below displays the number of hedge funds with bullish positions in ICON over the last 5 quarters, which has ended up back where it started. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HedgeFundSentimentChart

According to Insider Monkey’s hedge fund database, Huber Capital Management, led by Joe Huber, holds the most valuable position in Iconix Brand Group Inc (NASDAQ:ICON). Huber Capital Management has a $52.2 million position in the stock, comprising 2.1% of its 13F portfolio. The second most bullish fund manager is Graham Capital Management, led by Kenneth Tropin, holding a $6 million position. Remaining hedge funds and institutional investors with similar optimism contain David Keidan’s Buckingham Capital Management, Yi Xin’s Ariose Capital, and Renaissance Technologies, one of the largest hedge funds in the world. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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