Is K Swiss Inc (KSWS) Going to Burn These Hedge Funds?

K Swiss Inc (NASDAQ:KSWS) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. KSWS has experienced a decrease in activity from the world’s largest hedge funds recently. There were 9 hedge funds in our database with KSWS holdings at the end of the previous quarter.


To most shareholders, hedge funds are seen as unimportant, old financial vehicles of years past. While there are over 8000 funds with their doors open today, we look at the moguls of this group, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by tracking their top picks, we have formulated a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as integral, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a variety of incentives for an executive to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if shareholders know what to do (learn more here).

Now, we’re going to take a look at the latest action encompassing K Swiss Inc (NASDAQ:KSWS).

What have hedge funds been doing with K Swiss Inc (NASDAQ:KSWS)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in K Swiss Inc (NASDAQ:KSWS). Select Equity Group has a $5.6 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Ric Dillon’s Diamond Hill Capital, Jim Simons’s Renaissance Technologies and Jeffrey Vinik’s Vinik Asset Management.

Since K Swiss Inc (NASDAQ:KSWS) has faced declining sentiment from the smart money, logic holds that there was a specific group of money managers who were dropping their entire stakes last quarter. Intriguingly, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dropped the largest position of all the hedgies we key on, worth close to $0.1 million in stock., and Stuart Peterson of Artis Capital Management was right behind this move, as the fund said goodbye to about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.

How are insiders trading K Swiss Inc (NASDAQ:KSWS)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last six-month time frame, K Swiss Inc (NASDAQ:KSWS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to K Swiss Inc (NASDAQ:KSWS). These stocks are Tandy Leather Factory, Inc. (NASDAQ:TLF), Coldwater Creek Inc. (NASDAQ:CWTR), Rocky Brands, Inc. (NASDAQ:RCKY), Weyco Group, Inc. (NASDAQ:WEYS), and R.G. Barry Corp. (NASDAQ:DFZ). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps match KSWS’s market cap.