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Is Perry Ellis International, Inc. (PERY) A Good Stock To Buy?

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Perry Ellis International, Inc. (NASDAQ:PERY) .

Hedge fund interest in Perry Ellis International, Inc. (NASDAQ:PERY) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AR Capital Acquisition Corp (NASDAQ:AUMA), Addus Homecare Corporation (NASDAQ:ADUS), and TICC Capital Corp. (NASDAQ:TICC) to gather more data points.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to take a look at the key action encompassing Perry Ellis International, Inc. (NASDAQ:PERY).

Hedge fund activity in Perry Ellis International, Inc. (NASDAQ:PERY)

Heading into the fourth quarter of 2016, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PERY over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HedgeFundSentimentChart (1)

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Perry Ellis International, Inc. (NASDAQ:PERY). Renaissance Technologies has a $8.3 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $3.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Seeing as Perry Ellis International, Inc. (NASDAQ:PERY) has weathered staid sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds that slashed their entire stakes in the third quarter. Intriguingly, Ken Grossman and Glen Schneider’s SG Capital Management said goodbye to the largest position of the 700 funds studied by Insider Monkey, comprising close to $2 million in stock, and Mark N. Diker’s Diker Management was right behind this move, as the fund dropped about $0.4 million worth of shares.

Let’s go over hedge fund activity in other stocks similar to Perry Ellis International, Inc. (NASDAQ:PERY). These stocks are AR Capital Acquisition Corp (NASDAQ:AUMA), Addus Homecare Corporation (NASDAQ:ADUS), TICC Capital Corp. (NASDAQ:TICC), and Amira Nature Foods Ltd (NYSE:ANFI). This group of stocks’ market values are similar to PERY’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AUMA 11 117855 0
ADUS 5 7820 -1
TICC 5 5782 -3
ANFI 3 582 1

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $20 million in PERY’s case. AR Capital Acquisition Corp (NASDAQ:AUMA) is the most popular stock in this table. On the other hand Amira Nature Foods Ltd (NYSE:ANFI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Perry Ellis International, Inc. (NASDAQ:PERY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.