SAC Capital Advisors, managed by billionaire Steve Cohen, has reported a position of 2.6 million shares in Ann Inc (NYSE:ANN) or 5.3% of the total shares outstanding, according to a filing with the SEC. The fund crossed the 5% ownership threshold on March 5th, before the company announced strong Q4 earnings on March 8th which as of this writing have the stock up 7% on the day. 13D and 13G filings are not as comprehensive as quarterly 13F filings, and so it is more difficult to develop profitable investment strategies based on the included information (using 13Fs, for example, we have found that the most popular small cap stocks among hedge funds produced an excess return of 18 percentage points per year). However, they are more timely and we think many investors can benefit from seeing what top managers such as Cohen have recently bought and then doing more research to see if the stock is a good fit for their own portfolio. This is similar to how many investors use stock screens.
Ann Inc is a $1.5 billion market cap retailer of apparel and accessories for women. Its fiscal year ended in early February, with sales for the year up 7% from the previous one; the fourth fiscal quarter showed the same rate of revenue growth. According to the company, comparable sales were down slightly for the quarter. Earnings have also been up: the Q4 numbers were 9% higher than in the quarter ending January 2012, which was a slowdown from earlier in the fiscal year. EPS for the year were $2.10, which places the current price- even with the current runup- at 15 times trailing earnings. That price is generally right for companies which are experiencing low earnings growth.
At the end of December SAC had owned about 540,000 shares of Ann Inc after cutting its stake by 43% in the fourth quarter of 2012 (see Cohen’s stock picks). So Cohen and his team were buying nearly all of their shares in the last two months. Renaissance Technologies, whose founder Jim Simons is now a billionaire, had also been selling shares but was the largest holder of the stock in our database at that time with a position of a little less than 1 million shares (find Renaissance’s favorite stocks). Brett Barakett’s Tremblant Capital– the only other fund we track which had over $16 million invested in the stock- also reduced its position.
How does Ann measure up against its peers?