Crocs, Inc. (NASDAQ:CROX) was in 21 hedge funds’ portfolio at the end of December. CROX has seen a decrease in enthusiasm from smart money lately. There were 21 hedge funds in our database with CROX positions at the end of the previous quarter.
If you’d ask most traders, hedge funds are assumed to be worthless, outdated investment tools of the past. While there are over 8000 funds in operation today, we hone in on the top tier of this club, about 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their top equity investments, we have unsheathed a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading activity is another way to parse down the marketplace. Obviously, there are many incentives for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this tactic if piggybackers understand where to look (learn more here).
Keeping this in mind, we’re going to take a glance at the latest action regarding Crocs, Inc. (NASDAQ:CROX).
Hedge fund activity in Crocs, Inc. (NASDAQ:CROX)
Heading into 2013, a total of 21 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Daruma Asset Management, managed by Mariko Gordon, holds the biggest position in Crocs, Inc. (NASDAQ:CROX). Daruma Asset Management has a $57 million position in the stock, comprising 3.3% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $37 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Leon Cooperman’s Omega Advisors, David Keidan’s Buckingham Capital Management and Cliff Asness’s AQR Capital Management.
Due to the fact that Crocs, Inc. (NASDAQ:CROX) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies who sold off their entire stakes in Q4. Interestingly, Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital dropped the biggest stake of the “upper crust” of funds we track, worth about $34 million in stock., and Mark Broach of Manatuck Hill Partners was right behind this move, as the fund sold off about $32 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about 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 last six-month time frame, Crocs, Inc. (NASDAQ:CROX) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey’s time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Crocs, Inc. (NASDAQ:CROX) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.