Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Kate Spade & Co (NYSE:KATE) has experienced a decrease in support from the world’s most elite money managers recently. KATE was in 29 hedge funds’ portfolios at the end of September. There were 30 hedge funds in our database with KATE positions at the end of the previous quarter. At the end of this article we will also compare KATE to other stocks including Logitech International SA (USA) (NASDAQ:LOGI), UMB Financial Corporation (NASDAQ:UMBF), and GrubHub Inc (NYSE:GRUB) to get a better sense of its popularity.
Follow Kate Spade & Co (NYSE:KATE)
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What have hedge funds been doing with Kate Spade & Co (NYSE:KATE)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 3% from the second quarter of 2016, and the third consecutive quarter in which fewer hedge funds have owned shares of KATE. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, OZ Management, managed by Daniel S. Och, holds the largest position in Kate Spade & Co (NYSE:KATE). OZ Management has a $79.3 million position in the stock. Coming in second is Alexander Mitchell of Scopus Asset Management, with a $56.8 million position. Remaining members of the smart money that are bullish consist of Ken Fisher’s Fisher Asset Management, Robert Pohly’s Samlyn Capital, and Kamyar Khajavi’s MIK Capital.
Judging by the fact that Kate Spade & Co (NYSE:KATE) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers that slashed their positions entirely heading into fourth quarter. Intriguingly, Principal Global Investors’s Columbus Circle Investors sold off the largest stake of all the hedgies watched by Insider Monkey, comprising about $54.5 million in stock. Gregg Moskowitz’s fund, Interval Partners, also dropped its stock, about $11.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 fund heading into the fourth quarter.
Let’s check out hedge fund activity in other stocks similar to Kate Spade & Co (NYSE:KATE). We will take a look at Logitech International SA (USA) (NASDAQ:LOGI), UMB Financial Corporation (NASDAQ:UMBF), GrubHub Inc (NYSE:GRUB), and F.N.B. Corp (NYSE:FNB). This group of stocks’ market caps resemble KATE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LOGI | 11 | 68379 | 3 |
| UMBF | 9 | 64230 | 1 |
| GRUB | 29 | 1110708 | 4 |
| FNB | 14 | 169080 | 2 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $353 million. That figure was $535 million in KATE’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 9 bullish hedge fund positions. Kate Spade & Co (NYSE:KATE) is tied as the most popular stock in this group, but has far less money invested in it than GRUB does. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are pouring money into. In this regard GRUB might be a better candidate to consider a long position in.
Disclosure: None
