Here is What Hedge Funds Think About Zumiez Inc. (ZUMZ)
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Zumiez Inc. (NASDAQ:ZUMZ) based on those filings.
Zumiez Inc. (NASDAQ:ZUMZ) investors should be aware of a decrease in enthusiasm from smart money recently. Zumiez Inc. (NASDAQ:ZUMZ) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 24. Our calculations also showed that ZUMZ isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In today’s marketplace there are tons of signals investors put to use to grade stocks. A pair of the less utilized signals are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best money managers can outperform the broader indices by a superb margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Steven Cohen of Point72 Asset Management
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Do Hedge Funds Think ZUMZ Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in ZUMZ a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in Zumiez Inc. (NASDAQ:ZUMZ), which was worth $7.9 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $7.2 million worth of shares. Portolan Capital Management, Intrinsic Edge Capital, and Royce & Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to Zumiez Inc. (NASDAQ:ZUMZ), around 0.46% of its 13F portfolio. 0 is also relatively very bullish on the stock, earmarking 0.39 percent of its 13F equity portfolio to ZUMZ.
Because Zumiez Inc. (NASDAQ:ZUMZ) has witnessed bearish sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of funds that elected to cut their full holdings heading into Q2. Intriguingly, Dmitry Balyasny's Balyasny Asset Management sold off the biggest stake of the 750 funds monitored by Insider Monkey, valued at an estimated $9.2 million in stock. David Harding's fund, Winton Capital Management, also sold off its stock, about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q2.
Let's now review hedge fund activity in other stocks similar to Zumiez Inc. (NASDAQ:ZUMZ). We will take a look at Chase Corporation (NYSE:CCF), Boston Private Financial Hldg Inc (NASDAQ:BPFH), Tivity Health, Inc. (NASDAQ:TVTY), MarineMax, Inc. (NYSE:HZO), ProPetro Holding Corp. (NYSE:PUMP), Zogenix, Inc. (NASDAQ:ZGNX), and National Energy Services Reunited Corp. (NASDAQ:NESR). This group of stocks' market values are closest to ZUMZ's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCF,9,90070,-2 BPFH,24,182992,7 TVTY,24,381882,4 HZO,15,48512,-3 PUMP,17,75813,-3 ZGNX,21,377360,-9 NESR,12,58518,4 Average,17.4,173592,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $174 million. That figure was $53 million in ZUMZ's case. Boston Private Financial Hldg Inc (NASDAQ:BPFH) is the most popular stock in this table. On the other hand Chase Corporation (NYSE:CCF) is the least popular one with only 9 bullish hedge fund positions. Zumiez Inc. (NASDAQ:ZUMZ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ZUMZ is 65.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately ZUMZ wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ZUMZ were disappointed as the stock returned 0% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
