Crocs, Inc. (NASDAQ:CROX) has experienced an increase in activity from the world’s largest hedge funds lately.
To most shareholders, hedge funds are seen as unimportant, old financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the leaders of this group, close to 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by watching their best investments, we have formulated a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of incentives for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).
Consequently, let’s take a look at the recent action surrounding Crocs, Inc. (NASDAQ:CROX).
What have hedge funds been doing with Crocs, Inc. (NASDAQ:CROX)?
At the end of the first quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 4% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Crocs, Inc. (NASDAQ:CROX), worth close to $64.7 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Daruma Asset Management, managed by Mariko Gordon, which held a $61.2 million position; 3.1% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Leon Cooperman’s Omega Advisors, Cliff Asness’s AQR Capital Management and David Keidan’s Buckingham Capital Management.
Consequently, key money managers were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, initiated the most valuable position in Crocs, Inc. (NASDAQ:CROX). D E Shaw had 1.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.7 million position during the quarter. The other funds with brand new CROX positions are Jay Petschek and Steven Major’s Corsair Capital Management, Matthew Tewksbury’s Stevens Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Insider trading activity in Crocs, Inc. (NASDAQ:CROX)
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Crocs, Inc. (NASDAQ:CROX) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Crocs, Inc. (NASDAQ:CROX). These stocks are Steven Madden, Ltd. (NASDAQ:SHOO), Vera Bradley, Inc. (NASDAQ:VRA), Iconix Brand Group Inc (NASDAQ:ICON), Skechers USA Inc (NYSE:SKX), and Tumi Holdings Inc (NYSE:TUMI). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps match CROX’s market cap.