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Is Canada Goose Holdings Inc. (GOOS) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Canada Goose Holdings Inc. (NYSE:GOOS).

Canada Goose Holdings Inc. (NYSE:GOOS) investors should pay attention to a decrease in hedge fund interest recently. Our calculations also showed that GOOS isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Richard Driehaus

Let’s go over the fresh hedge fund action encompassing Canada Goose Holdings Inc. (NYSE:GOOS).

Hedge fund activity in Canada Goose Holdings Inc. (NYSE:GOOS)

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in GOOS at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

GOOS_dec2018

Among these funds, McKinley Capital Management held the most valuable stake in Canada Goose Holdings Inc. (NYSE:GOOS), which was worth $39.6 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $18.4 million worth of shares. Moreover, Driehaus Capital, Millennium Management, and Shellback Capital were also bullish on Canada Goose Holdings Inc. (NYSE:GOOS), allocating a large percentage of their portfolios to this stock.

Seeing as Canada Goose Holdings Inc. (NYSE:GOOS) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers who were dropping their full holdings in the third quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling about $35.2 million in stock, and George Soros’s Soros Fund Management was right behind this move, as the fund cut about $11.6 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 8 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Canada Goose Holdings Inc. (NYSE:GOOS) but similarly valued. These stocks are PNM Resources, Inc. (NYSE:PNM), CVB Financial Corp. (NASDAQ:CVBF), Community Bank System, Inc. (NYSE:CBU), and Moog Inc (NYSE:MOG). All of these stocks’ market caps are closest to GOOS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PNM 19 264822 6
CVBF 11 46106 5
CBU 9 23697 1
MOG 13 66365 -5
Average 13 100248 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $148 million in GOOS’s case. PNM Resources, Inc. (NYSE:PNM) is the most popular stock in this table. On the other hand Community Bank System, Inc. (NYSE:CBU) is the least popular one with only 9 bullish hedge fund positions. Canada Goose Holdings Inc. (NYSE:GOOS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PNM might be a better candidate to consider a long position.

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

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