Is it smart to be bullish on Iconix Brand Group Inc (NASDAQ:ICON)?
If you were to ask many of your fellow readers, hedge funds are perceived as useless, old financial tools of a period lost to current times. Although there are over 8,000 hedge funds with their doors open today, Insider Monkey focuses on the moguls of this club, around 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by watching their best equity investments, we’ve identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as crucial, optimistic insider trading activity is a second way to look at the investments you’re interested in. Obviously, there are lots of motivations for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, let’s analyze the latest info for Iconix Brand Group Inc (NASDAQ:ICON).
How are hedge funds trading Iconix Brand Group Inc (NASDAQ:ICON)?
In preparation for the third quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -27% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially.
Judging by the fact that Iconix Brand Group Inc (NASDAQ:ICON) has faced declining interest from the top-tier hedge fund industry, logic holds that there were a few hedge funds that slashed their positions entirely heading into Q2. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the largest investment of all the hedgies we monitor, worth close to $4.1 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund said goodbye to about $1.4 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds heading into Q2.
Insider trading activity in Iconix Brand Group Inc (NASDAQ:ICON)
Insider buying made by high-level executives is at its handiest when the company in focus has seen transactions within the past six months. Over the last half-year time period, Iconix Brand Group Inc (NASDAQ:ICON) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Iconix Brand Group Inc (NASDAQ:ICON). These stocks are Wolverine World Wide, Inc. (NYSE:WWW), Crocs, Inc. (NASDAQ:CROX), Tumi Holdings Inc (NYSE:TUMI), Deckers Outdoor Corp (NASDAQ:DECK), and Steven Madden, Ltd. (NASDAQ:SHOO). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps resemble ICON’s market cap.