Is Skechers USA Inc (SKX) A Good Stock To Buy?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Skechers USA Inc (NYSE:SKX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Skechers USA Inc (NYSE:SKX) shareholders have witnessed an increase in hedge fund interest lately. At the end of this article we will also compare SKX to other stocks including Gartner Inc (NYSE:IT), Williams-Sonoma, Inc. (NYSE:WSM), and Plum Creek Timber Co. Inc. (NYSE:PCL) to get a better sense of its popularity.

To the average investor there are a multitude of formulas stock traders put to use to evaluate publicly traded companies. A pair of the most underrated formulas are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a solid amount (see the details here).

Now, let’s go over the fresh action regarding Skechers USA Inc (NYSE:SKX).

What have hedge funds been doing with Skechers USA Inc (NYSE:SKX)?

At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Armitage’s Egerton Capital Limited has the largest position in Skechers USA Inc (NYSE:SKX), worth close to $118.8 million, comprising 1.3% of its total 13F portfolio. On Egerton Capital Limited’s heels is AQR Capital Management, led by Cliff Asness, holding a $78.9 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions contain Israel Englander’s Millennium Management, Jim Simons’ Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, specific money managers have jumped into Skechers USA Inc (NYSE:SKX) headfirst. PDT Partners, managed by Peter Muller, established the biggest position in Skechers USA Inc (NYSE:SKX). PDT Partners had $15.3 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also made a $12.8 million investment in the stock during the quarter. The following funds were also among the new SKX investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Israel Englander’s Millennium Management, and Chao Ku’s Nine Chapters Capital Management.

Let’s now review hedge fund activity in other stocks similar to Skechers USA Inc (NYSE:SKX). These stocks are Gartner Inc (NYSE:IT), Williams-Sonoma, Inc. (NYSE:WSM), Plum Creek Timber Co. Inc. (NYSE:PCL), and Franco-Nevada Corporation (NYSE:FNV). This group of stocks’ market caps resemble SKX’s market cap.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $442 million. That figure was $600 million in SKX’s case. Williams-Sonoma, Inc. (NYSE:WSM) is the most popular stock in this table. On the other hand Franco-Nevada Corporation (NYSE:FNV) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Skechers USA Inc (NYSE:SKX) 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.