In the financial world, there are tons of methods market participants can use to watch Mr. Market. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outclass the market by a healthy amount (see just how much).
Equally as necessary, bullish insider trading sentiment is a second way to analyze the stock market universe. Obviously, there are a variety of stimuli for an executive to sell shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).
Furthermore, let's study the recent info surrounding Limited Brands, Inc. (NYSE:LTD).
In preparation for the third quarter, a total of 21 of the hedge funds we track were long in this stock, a change of 50% from the first quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.
Out of the hedge funds we follow, Coatue Management, managed by Philippe Laffont, holds the most valuable position in Limited Brands, Inc. (NYSE:LTD). Coatue Management has a $196.6 million position in the stock, comprising 2.2% of its 13F portfolio. The second largest stake is held by Paul Ruddock and Steve Heinz of Lansdowne Partners, with a $135.6 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Andrew J. M. Spokes's Farallon Capital, Murray Stahl's Horizon Asset Management and Christopher R. Hansen's Valiant Capital.
As industrywide interest increased, certain money managers were breaking ground themselves. Coatue Management, managed by Philippe Laffont, assembled the most outsized position in Limited Brands, Inc. (NYSE:LTD). Coatue Management had 196.6 million invested in the company at the end of the quarter. Paul Ruddock and Steve Heinz's Lansdowne Partners also initiated a $135.6 million position during the quarter. The other funds with brand new LTD positions are Andrew J. M. Spokes's Farallon Capital, Murray Stahl's Horizon Asset Management, and Christopher R. Hansen's Valiant Capital.
Insider buying is particularly usable when the company we're looking at has experienced transactions within the past six months. Over the last 180-day time period, Limited Brands, Inc. (NYSE:LTD) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Limited Brands, Inc. (NYSE:LTD). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Nordstrom, Inc. (NYSE:JWN), Michael Kors Holdings Ltd (NYSE:KORS), and Ross Stores, Inc. (NASDAQ:ROST). This group of stocks are the members of the apparel stores industry and their market caps are similar to LTD's market cap.