Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on several financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Foot Locker, Inc. (NYSE:FL) based on that data.
Foot Locker, Inc. (NYSE:FL) has seen a decrease in enthusiasm from smart money in recent months. FL was in 29 hedge funds’ portfolios at the end of the third quarter of 2016. There were 31 hedge funds in our database with FL positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as InterContinental Hotels Group PLC (ADR) (NYSE:IHG), W.R. Berkley Corporation (NYSE:WRB), and Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) to gather more data points.
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.
Now, we’re going to take a gander at the recent action regarding Foot Locker, Inc. (NYSE:FL).
What have hedge funds been doing with Foot Locker, Inc. (NYSE:FL)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 6% from the second quarter of 2016. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Steven Richman’s East Side Capital (RR Partners) has the largest position in Foot Locker, Inc. (NYSE:FL), worth close to $192.3 million and accounting for 9.3% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $174.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Robert Pohly’s Samlyn Capital.
Due to the fact that Foot Locker, Inc. (NYSE:FL) has experienced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies who sold off their entire stakes by the end of the third quarter. At the top of the heap, Rob Citrone’s Discovery Capital Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $28.4 million in call options. Ken Griffin’s fund, Citadel Investment Group, also cut its holding of call options, worth about $25.6 million. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Foot Locker, Inc. (NYSE:FL). We will take a look at InterContinental Hotels Group PLC (ADR) (NYSE:IHG), W.R. Berkley Corporation (NYSE:WRB), Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), and Brookfield Infrastructure Partners L.P. (NYSE:BIP). All of these stocks’ market caps are closest to FL’s market cap.
|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 12 hedge funds with bullish positions and the average amount invested in these stocks was $269 million. That figure was $1.02 billion in FL’s case. Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (ADR) (NYSE:IHG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Foot Locker, Inc. (NYSE:FL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.