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Hedge Funds Aren’t Crazy About Steven Madden, Ltd. (SHOO) Anymore

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What’s a smart Steven Madden, Ltd. (NASDAQ:SHOO) investor to do?

In the eyes of many of your peers, hedge funds are seen as useless, old financial tools of an era lost to time. Although there are In excess of 8,000 hedge funds in operation in present day, Insider Monkey aim at the moguls of this group, around 525 funds. It is widely held that this group has its hands on most of the smart money’s total capital, and by paying attention to their highest performing picks, we’ve deciphered a number of investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy beat 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 outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as necessary, bullish insider trading activity is a second way to analyze the world of equities. Obviously, there are a number of motivations for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).

Steven Madden, Ltd. (NASDAQ:SHOO)

Now that that’s out of the way, we’re going to study the newest info for Steven Madden, Ltd. (NASDAQ:SHOO).

What have hedge funds been doing with Steven Madden, Ltd. (NASDAQ:SHOO)?

At Q2’s end, a total of 15 of the hedge funds we track were long in this stock, a change of -12% from the first quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.

Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the biggest position in Steven Madden, Ltd. (NASDAQ:SHOO), worth close to $113.5 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Impala Asset Management, managed by Robert Bishop, which held a $49.1 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Donald Chiboucis’s Columbus Circle Investors, Ken Griffin’s Citadel Investment Group and Joel Greenblatt’s Gotham Asset Management.

Because Steven Madden, Ltd. (NASDAQ:SHOO) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few fund managers that elected to cut their entire stakes at the end of the second quarter. Intriguingly, Wojciech Uzdelewicz’s Espalier Global Management cut the biggest stake of the 450+ funds we watch, totaling an estimated $5.6 million in stock, and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund dropped about $2.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 2 funds at the end of the second quarter.

Insider trading activity in Steven Madden, Ltd. (NASDAQ:SHOO)

Insider buying made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the last 180-day time period, Steven Madden, Ltd. (NASDAQ:SHOO) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Steven Madden, Ltd. (NASDAQ:SHOO). 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 Deckers Outdoor Corp (NASDAQ:DECK). All of these stocks are in the textile – apparel footwear & accessories industry and their market caps resemble SHOO’s market cap.

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