There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Buckle Inc (NYSE:BKE) .
Buckle Inc (NYSE:BKE) has experienced an increase in hedge fund interest lately. 15 hedge funds that we track were long the stock on September 30. There were 12 hedge funds in our database with BKE holdings at the end of the June quarter. At the end of this article we will also compare BKE to other stocks including Endurance International Group Hldgs Inc (NASDAQ:EIGI), Globalstar, Inc. (PINK:GSAT), and Methode Electronics Inc. (NYSE:MEI) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Buckle Inc (NYSE:BKE)?
Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a 25% rise from the second quarter of 2016. There were a total of 11 hedge funds with a bullish position in BKE at the beginning of this year, so while volatile, hedge fund sentiment has been positive overall. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the biggest position in Buckle Inc (NYSE:BKE), worth close to $83.5 million. The second most bullish fund manager is Alexander Medina Seaver of Stadium Capital Management, with a $13.5 million position; 4.4% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish consist of Joel Greenblatt’s Gotham Asset Management, Eric Sprott’s Sprott Asset Management, and Steve Cohen’s Point72 Asset Management. We should note that Sprott Asset Management is 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.
Now, specific money managers have been driving this bullishness. Point72 Asset Management initiated the most outsized position in Buckle Inc (NYSE:BKE). Point72 Asset Management had $3 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also made a $1.3 million investment in the stock during the quarter. The following funds were also among the new BKE investors: Matthew Tewksbury’s Stevens Capital Management, Joshua Packwood and Schuster Tanger’s Radix Partners, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to Buckle Inc (NYSE:BKE). These stocks are Endurance International Group Hldgs Inc (NASDAQ:EIGI), Globalstar, Inc. (PINK:GSAT), Methode Electronics Inc. (NYSE:MEI), and Denbury Resources Inc. (NYSE:DNR). This group of stocks’ market values are similar to BKE’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $115 million in BKE’s case. Globalstar, Inc. (PINK:GSAT) is the most popular stock in this table. On the other hand Endurance International Group Hldgs Inc (NASDAQ:EIGI) is the least popular one with only 7 bullish hedge fund positions. Buckle Inc (NYSE:BKE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GSAT might be a better candidate to consider taking a long position in.