The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Crocs, Inc. (NASDAQ:CROX).
Is Crocs, Inc. (NASDAQ:CROX) the right pick for your portfolio? Money managers were turning less bullish. The number of bullish hedge fund positions retreated by 10 recently. Crocs, Inc. (NASDAQ:CROX) was in 31 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 41. Our calculations also showed that CROX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Crocs, Inc. (NASDAQ:CROX).
Do Hedge Funds Think CROX Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -24% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in CROX over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Samlyn Capital, managed by Robert Pohly, holds the most valuable position in Crocs, Inc. (NASDAQ:CROX). Samlyn Capital has a $139.4 million position in the stock, comprising 1.9% of its 13F portfolio. On Samlyn Capital’s heels is Polaris Capital Management, led by Bernard Horn, holding a $87.5 million position; 2.9% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism comprise Renaissance Technologies, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Woodson Capital Management allocated the biggest weight to Crocs, Inc. (NASDAQ:CROX), around 3.6% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 2.87 percent of its 13F equity portfolio to CROX.
Since Crocs, Inc. (NASDAQ:CROX) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of fund managers that decided to sell off their positions entirely heading into Q2. At the top of the heap, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $23.8 million in stock, and Principal Global Investors’s Columbus Circle Investors was right behind this move, as the fund sold off about $20.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 10 funds heading into Q2.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Crocs, Inc. (NASDAQ:CROX) but similarly valued. These stocks are Nutanix, Inc. (NASDAQ:NTNX), Enel Chile S.A. (NYSE:ENIC), Quidel Corporation (NASDAQ:QDEL), J2 Global Inc (NASDAQ:JCOM), KBR, Inc. (NYSE:KBR), Perrigo Co Plc (NYSE:PRGO), and Ashland Global Holdings Inc. (NYSE:ASH). This group of stocks’ market values are similar to CROX’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $575 million. That figure was $700 million in CROX’s case. Ashland Global Holdings Inc. (NYSE:ASH) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 7 bullish hedge fund positions. Crocs, Inc. (NASDAQ:CROX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CROX is 59.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on CROX as the stock returned 45.2% since the end of Q1 (through 7/2) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.