Here’s why one indicator is bearish on Michael Kors Holdings Ltd (NYSE:KORS).
In the 21st century investor’s toolkit, there are plenty of gauges market participants can use to watch publicly traded companies. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outclass the broader indices by a significant amount (see just how much).
Equally as key, optimistic insider trading activity is a second way to analyze the marketplace. Obviously, there are a variety of reasons for an insider to drop shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).
Furthermore, it’s important to examine the recent info surrounding Michael Kors Holdings Ltd (NYSE:KORS).
How are hedge funds trading Michael Kors Holdings Ltd (NYSE:KORS)?
At Q2’s end, a total of 46 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings substantially.
According to our 13F database, Viking Global, managed by Andreas Halvorsen, holds the largest position in Michael Kors Holdings Ltd (NYSE:KORS). Viking Global has a $835.7 million position in the stock, comprising 4.6% of its 13F portfolio. Coming in second is Stephen Mandel of Lone Pine Capital, with a $553.5 million position; 2.7% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Donald Chiboucis’s Columbus Circle Investors, Bain Capital’s Brookside Capital and John Griffin’s Blue Ridge Capital.
Because Michael Kors Holdings Ltd (NYSE:KORS) has faced a fall in interest from upper-tier hedge fund managers, logic holds that there were a few money managers that decided to sell off their positions entirely at the end of the second quarter. Interestingly, Jeffrey Vinik’s Vinik Asset Management sold off the biggest position of all the hedgies we watch, totaling an estimated $78.9 million in stock, and Christian Leone of Luxor Capital Group was right behind this move, as the fund cut about $51.6 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds at the end of the second quarter.
How are insiders trading Michael Kors Holdings Ltd (NYSE:KORS)?
Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, Michael Kors Holdings Ltd (NYSE:KORS) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Michael Kors Holdings Ltd (NYSE:KORS). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Ross Stores, Inc. (NASDAQ:ROST), Limited Brands, Inc. (NYSE:LTD), and Nordstrom, Inc. (NYSE:JWN). This group of stocks are in the apparel stores industry and their market caps are similar to KORS’s market cap.