Is Ann Inc (NYSE:ANN) a healthy stock for your portfolio? The smart money is in a pessimistic mood. The number of long hedge fund positions were trimmed by 1 lately.
According to most traders, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we hone in on the crème de la crème of this club, about 450 funds. It is widely believed that this group controls the majority of all hedge funds' total asset base, and by keeping an eye on their best stock picks, we have revealed a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as important, bullish insider trading sentiment is a second way to break down the financial markets. Just as you'd expect, there are a variety of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).
Now, it's important to take a peek at the key action surrounding Ann Inc (NYSE:ANN).
At year's end, a total of 20 of the hedge funds we track were bullish in this stock, a change of -5% from the third quarter. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Jim Simons's Renaissance Technologies had the biggest position in Ann Inc (NYSE:ANN), worth close to $33 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Brett Barakett of Tremblant Capital, with a $28 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include Steven Cohen's SAC Capital Advisors, David Keidan's Buckingham Capital Management and D. E. Shaw's D E Shaw.
Due to the fact that Ann Inc (NYSE:ANN) has faced declining sentiment from hedge fund managers, we can see that there was a specific group of hedgies that elected to cut their positions entirely heading into 2013. It's worth mentioning that Joe DiMenna's ZWEIG DIMENNA PARTNERS dropped the biggest investment of the 450+ funds we monitor, totaling close to $19 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund said goodbye to about $8 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds heading into 2013.
Insider buying is particularly usable when the company we're looking at has experienced transactions within the past 180 days. Over the last half-year time period, Ann Inc (NYSE:ANN) has experienced 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey's time-tested strategies, retail investors should always watch hedge fund and insider trading activity, and Ann Inc (NYSE:ANN) applies perfectly to this mantra.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.