#3 Carter’s, Inc. (NYSE:CRI)
– Investors with Long Positions (as of December 31): 35
– Aggregate Value of Investors’ Holdings (as of December 31): $1.06 billion
Though Carter’s, Inc. (NYSE:CRI)’s stock started drifting lower in the second-half of 2015, it still counts as one of the best performing apparel stock in the past five years with gains of 262% during that period. Interestingly, during the fourth quarter of 2015, the ownership of the company among funds tracked by us declined by 11, but the aggregate value of their holdings in it remained nearly constant. Robert Pohly‘s Samlyn Capital was among the hedge funds which initiated a stake in Carter’s, Inc. (NYSE:CRI) during the fourth quarter, it held 759,848 shares of the company at the end of December. Owing to the earnings and revenue beat the company delivered for the fourth quarter, its stock is currently trading up 12% year-to-date. While the Street was expecting the company to report EPS of $1.29 on revenue of $858.60 million, it declared EPS of $1.40 on revenue of $867 million. Along with its earnings, the company also announced a $500 million share repurchase program and hiked its quarterly dividend by 50% to $0.33 per share, which analysts see as a positive move that will safeguard the stock from any sharp corrections.
#2 Kate Spade & Co (NYSE:KATE)
– Investors with Long Positions (as of December 31): 36
– Aggregate Value of Investors’ Holdings (as of December 31): $463 million
Moving on, the number of funds bullish on Kate Spade & Co (NYSE:KATE) increased by eight during the fourth quarter, however, the aggregate value of their positions declined by $663 million. With ownership of over 5.6 million shares of the company, Samlyn Capital was the largest shareholder at the end of December among funds covered by us. Shares of Kate Spade & Co (NYSE:KATE) started gaining ground in mid-February in anticipation of the company’s fourth quarter results and continued their upward trajectory after it guided strong full year fiscal 2016 comps on March 1. Owing largely to this rally, they are currently trading up 37.8% year-to-date. For its fourth quarter, the company reported EPS of $0.32 on revenue of $428 million, compared to the EPS of $0.24 on revenue of $399 million that it had reported for the same quarter of the previous financial year. Analysts who track the stock currently feel that after the recent run up it is fully valued now, however, they caution investors from shorting the stock, despite its very high debt-to-equity multiple of 231.59. On March 16, analysts at Wells Fargo reiterated their ‘Market Perform’ rating on the stock.
#1 Coach Inc (NYSE:COH)
– Investors with Long Positions (as of December 31): 37
– Aggregate Value of Investors’ Holdings (as of December 31): $737.55 million
With its ownership having grown by 10 and the aggregate value of long positions in the company having surged by 72% during the fourth quarter, Coach Inc (NYSE:COH) emerged as the most popular fashion stock among the funds we track heading into 2016. The stock has lived up to the faith that these investors displayed in it by rising over 18% this year. Dmitry Balyasny‘s Balyasny Asset Management, which initiated a stake in the company during the fourth quarter by purchasing 3.0 million shares, was the second-largest shareholder of Coach Inc (NYSE:COH) at the end of December among investors covered by us. The company is expected to report its fiscal 2016 third quarter results next month and analysts project EPS of $0.41 on revenue of $1.02 billion, considerably higher than the EPS of $0.36 on revenue of $929 million it delivered for the same quarter of the previous year. The 37 prominent analysts and research houses on Wall Street that cover the stock currently have an average rating of ‘Overweight’ with an average price target of $39.03, close to the current price of the stock.