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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Weyco Group, Inc. (NASDAQ:WEYS).
Is Weyco Group, Inc. (NASDAQ:WEYS) undervalued? Money managers are taking a bullish view. The number of bullish hedge fund bets increased by 1 recently. Our calculations also showed that WEYS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). WEYS was in 4 hedge funds' portfolios at the end of March. There were 3 hedge funds in our database with WEYS holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a gander at the recent hedge fund action surrounding Weyco Group, Inc. (NASDAQ:WEYS).
How have hedgies been trading Weyco Group, Inc. (NASDAQ:WEYS)?
Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in WEYS over the last 18 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Weyco Group, Inc. (NASDAQ:WEYS). Royce & Associates has a $2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Royce & Associates's heels is Renaissance Technologies, which holds a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish include Ali Motamed's Invenomic Capital Management, Israel Englander's Millennium Management and . In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Weyco Group, Inc. (NASDAQ:WEYS), around 0.8% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to WEYS.
Now, some big names were leading the bulls' herd. Millennium Management, managed by Israel Englander, established the most valuable position in Weyco Group, Inc. (NASDAQ:WEYS). Millennium Management had $0.4 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks similar to Weyco Group, Inc. (NASDAQ:WEYS). We will take a look at COMSCORE, Inc. (NASDAQ:SCOR), Transcat, Inc. (NASDAQ:TRNS), NACCO Industries, Inc. (NYSE:NC), and Hurco Companies, Inc. (NASDAQ:HURC). This group of stocks' market valuations resemble WEYS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SCOR,18,60183,-1 TRNS,7,36708,-1 NC,5,10318,-4 HURC,5,31460,-1 Average,8.75,34667,-1.75 [/table]
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $5 million in WEYS's case. COMSCORE, Inc. (NASDAQ:SCOR) is the most popular stock in this table. On the other hand NACCO Industries, Inc. (NYSE:NC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Weyco Group, Inc. (NASDAQ:WEYS) is even less popular than NC. Hedge funds dodged a bullet by taking a bearish stance towards WEYS. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately WEYS wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); WEYS investors were disappointed as the stock returned -6.3% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
