Hedge Funds Continue Ditching Columbia Sportswear Company (COLM)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Columbia Sportswear Company (NASDAQ:COLM).

Columbia Sportswear Company (NASDAQ:COLM) was in 26 hedge funds’ portfolios at the end of the third quarter of 2019. COLM has experienced a decrease in activity from the world’s largest hedge funds lately. There were 27 hedge funds in our database with COLM positions at the end of the previous quarter. Our calculations also showed that COLM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are many metrics shareholders put to use to evaluate their stock investments. Some of the best metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outpace their index-focused peers by a superb amount (see the details here).

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to review the key hedge fund action surrounding Columbia Sportswear Company (NASDAQ:COLM).

What have hedge funds been doing with Columbia Sportswear Company (NASDAQ:COLM)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards COLM over the last 17 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

No of Hedge Funds with COLM Positions

More specifically, Arrowstreet Capital was the largest shareholder of Columbia Sportswear Company (NASDAQ:COLM), with a stake worth $48.6 million reported as of the end of September. Trailing Arrowstreet Capital was AQR Capital Management, which amassed a stake valued at $38.3 million. Citadel Investment Group, Broad Bay Capital, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Broad Bay Capital allocated the biggest weight to Columbia Sportswear Company (NASDAQ:COLM), around 3.81% of its portfolio. Beddow Capital Management is also relatively very bullish on the stock, dishing out 0.22 percent of its 13F equity portfolio to COLM.

Seeing as Columbia Sportswear Company (NASDAQ:COLM) has experienced falling interest from the smart money, logic holds that there lies a certain “tier” of funds that decided to sell off their positions entirely heading into Q4. It’s worth mentioning that Steve Cohen’s Point72 Asset Management cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $15.5 million in stock. Charles Davidson and Joseph Jacobs’s fund, Wexford Capital, also sold off its stock, about $2.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Columbia Sportswear Company (NASDAQ:COLM) but similarly valued. These stocks are Alliance Data Systems Corporation (NYSE:ADS), Robert Half International Inc. (NYSE:RHI), Steel Dynamics, Inc. (NASDAQ:STLD), and PVH Corp (NYSE:PVH). This group of stocks’ market valuations resemble COLM’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADS 35 1242255 1
RHI 21 577040 -5
STLD 25 515633 -6
PVH 27 1027637 -5
Average 27 840641 -3.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $841 million. That figure was $155 million in COLM’s case. Alliance Data Systems Corporation (NYSE:ADS) is the most popular stock in this table. On the other hand Robert Half International Inc. (NYSE:RHI) is the least popular one with only 21 bullish hedge fund positions. Columbia Sportswear Company (NASDAQ:COLM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately COLM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); COLM investors were disappointed as the stock returned -4.3% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.