Hedge Funds Bet Big on Retail Stocks Ahead of Back-to-School and Holiday Seasons

Strategic Insights -

As the holiday season approaches, hedge fund managers like George Soros, David Einhorn, and Warren Buffett are making significant bets on retail stocks. Despite a revised forecast for 2015 retail sales growth, indicated by the National Retail Federation's revision of its forecast to 3.5% from 4.1% last month, citing "unexpectedly slow growth" during the first half of the year, U.S. retail sales advanced 0.6% in July, outpacing the Thomson Reuters consensus forecast of a 0.5% rise. Hedge funds are looking at the retail space and picking out which companies they anticipate will fare best.

Key Takeaways:

  • George Soros' Soros Fund Management purchased a small stake in Aeropostale (ARO) in the second quarter of 2015, with 210,800 shares valued at $341,000.
  • David Einhorn's Greenlight Capital picked up a new stake in Dillard's (DDS) in the second quarter, with 375,000 shares valued at $39.4 million.
  • Larry Robbins' Glenview Capital bought into Gap (GPS) in the first quarter and boosted its stake since June 30, with nearly 6 million shares valued at $228.8 million.
  • Greenlight Capital initiated a stake in Macy's (M) in the first quarter of 2015 with the acquisition of nearly 1.7 million shares, but downsized its position as of June 30 to more than 1 million shares worth $68.7 million.
  • Leon Cooperman's Omega Advisors bought into Sears Holding Company (SHLD) in the first quarter of 2015 and upped its stake in the second to 1.6 million shares valued at $42.1 million.
  • Warren Buffett's Berkshire Hathaway owns 60.4 million Wal-Mart (WMT) shares, worth $4.3 billion, as of June 30.

Statistics:

  • 3.5% revised forecast for 2015 retail sales growth (National Retail Federation)
  • 0.6% advance in U.S. retail sales in July (Reuters)
  • 210,800 shares of Aeropostale (ARO) purchased by Soros Fund Management (13F filing)
  • $341,000 value of Aeropostale (ARO) shares purchased by Soros Fund Management
  • 375,000 shares of Dillard's (DDS) purchased by Greenlight Capital (13F filing)
  • $39.4 million value of Dillard's (DDS) shares purchased by Greenlight Capital
  • 6 million shares of Gap (GPS) purchased by Glenview Capital (13F filing)
  • $228.8 million value of Gap (GPS) shares purchased by Glenview Capital
  • 1.7 million shares of Macy's (M) purchased by Greenlight Capital (13F filing)
  • $68.7 million value of Macy's (M) shares purchased by Greenlight Capital
  • 1.6 million shares of Sears Holding Company (SHLD) purchased by Omega Advisors (13F filing)
  • $42.1 million value of Sears Holding Company (SHLD) shares purchased by Omega Advisors
  • 60.4 million shares of Wal-Mart (WMT) owned by Berkshire Hathaway (13F filing)
  • $4.3 billion value of Wal-Mart (WMT) shares owned by Berkshire Hathaway

Sources:

  • "National Retail Federation Revises Down 2015 US Retail Sales Forecast" - CNBC (07/22/15)
  • "US Retail Sales Rise 0.6% in July" - Reuters (08/13/15)
  • "13F Filing: AEROPOSTALE INC" - SEC (06/30/15)
  • "13F Filing: Dillard's, Inc." - SEC (06/30/15)
  • "13F Filing: Gap Inc." - SEC (06/30/15)
  • "13F Filing: Macy's, Inc." - SEC (06/30/15)
  • "13F Filing: Sears Holdings Corp." - SEC (06/30/15)
  • "13F Filing: Berkshire Hathaway Inc." - SEC (06/30/15)