Is Michael Kors Holdings Ltd (NYSE:KORS) an excellent stock to buy now? Hedge funds are selling. The number of long hedge fund bets fell by 9 lately.
At the moment, there are many gauges investors can use to monitor Mr. Market. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a very impressive margin (see just how much).
Equally as integral, optimistic insider trading activity is a second way to parse down the investments you’re interested in. There are lots of stimuli for an insider to sell shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if shareholders understand what to do (learn more here).
Now, it’s important to take a glance at the key action encompassing Michael Kors Holdings Ltd (NYSE:KORS).
How are hedge funds trading Michael Kors Holdings Ltd (NYSE:KORS)?
At the end of the fourth quarter, a total of 39 of the hedge funds we track were bullish in this stock, a change of -19% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Lone Pine Capital, managed by Stephen Mandel, holds the largest position in Michael Kors Holdings Ltd (NYSE:KORS). Lone Pine Capital has a $461 million position in the stock, comprising 2.9% of its 13F portfolio. On Lone Pine Capital’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $190 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Bain Capital’s Brookside Capital, Donald Chiboucis’s Columbus Circle Investors and Andreas Halvorsen’s Viking Global.
Judging by the fact that Michael Kors Holdings Ltd (NYSE:KORS) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of money managers that elected to cut their entire stakes at the end of the year. Intriguingly, Jonathon Jacobson’s Highfields Capital Management dropped the biggest investment of the “upper crust” of funds we key on, totaling about $69 million in call options, and Jim Simons of Renaissance Technologies was right behind this move, as the fund dumped about $39 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 9 funds at the end of the year.
What do corporate executives and insiders think about Michael Kors Holdings Ltd (NYSE:KORS)?
Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past half-year. Over the last half-year time period, Michael Kors Holdings Ltd (NYSE:KORS) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Michael Kors Holdings Ltd (NYSE:KORS). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Ross Stores, Inc. (NASDAQ:ROST), Limited Brands, Inc. (NYSE:LTD), and Nordstrom, Inc. (NYSE:JWN). This group of stocks are the members of the apparel stores industry and their market caps resemble KORS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Urban Outfitters, Inc. (NASDAQ:URBN)||25||0||4|
|The Gap Inc. (NYSE:GPS)||29||0||7|
|Ross Stores, Inc. (NASDAQ:ROST)||30||0||5|
|Limited Brands, Inc. (NYSE:LTD)||19||1||0|
|Nordstrom, Inc. (NYSE:JWN)||26||0||6|
With the returns demonstrated by our strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Michael Kors Holdings Ltd (NYSE:KORS) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.
Related tickers: Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Ross Stores, Inc. (NASDAQ:ROST), Limited Brands, Inc. (NYSE:LTD), Nordstrom, Inc. (NYSE:JWN), Michael Kors Holdings Ltd (NYSE:KORS)