Should You Avoid Skechers USA Inc (SKX)?

How are hedge funds trading Skechers USA Inc (NYSE:SKX)?

When looking at the hedgies followed by Insider Monkey, Dmitry Balyasny‘s Balyasny Asset Management had the biggest position in Skechers USA Inc (NYSE:SKX), of 806,702 shares, worth close to $58 million, accounting for 0.5% of its total 13F portfolio. The second-most bullish hedge fund manager was Visium Asset Management, led by Jacob Gottlieb, holding a $45.6 million position of 634,527 shares; 0.7% of its 13F portfolio was allocated to the stock. Some other hedge funds that were bullish contained Jim Simons‘ Renaissance Technologies, Gabriel Plotkin’s Melvin Capital Management, and Alexander Mitchell’s Scopus Asset Management.

Since Skechers USA Inc (NYSE:SKX) has experienced declining sentiment from the smart money, logic holds that there were a few hedge funds that decided to sell off their positions entirely in the first quarter. Interestingly, Ken Grossman and Glen Schneider’s SG Capital Management cut the largest investment of the 700 funds watched by Insider Monkey, totaling about $13.9 million in stock. David Keidan‘s fund, Buckingham Capital Management, also dropped its stock, about $11.1 million worth. These moves are important to note, as total hedge fund interest fell by three funds in the first quarter.

Given the rapid appreciation of the stock in the face of bearish hedge fund sentiment, it’s hard to recommend this stock right now at its rich valuation, although we can clearly say that in this case, the smart money has gotten it wrong so far.

Disclosure: None