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Do Hedge Funds and Insiders Love Staples, Inc. (SPLS)?

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Staples, Inc. (NASDAQ:SPLS) was in 37 hedge funds’ portfolio at the end of March. SPLS shareholders have witnessed a decrease in hedge fund interest lately. There were 37 hedge funds in our database with SPLS holdings at the end of the previous quarter.

If you’d ask most investors, hedge funds are perceived as slow, old investment vehicles of years past. While there are over 8000 funds trading at the moment, we at Insider Monkey choose to focus on the bigwigs of this group, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by tracking their best stock picks, we have found a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as important, positive insider trading activity is a second way to break down the world of equities. As the old adage goes: there are lots of incentives for an insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).

With these “truths” under our belt, let’s take a peek at the key action regarding Staples, Inc. (NASDAQ:SPLS).

How are hedge funds trading Staples, Inc. (NASDAQ:SPLS)?

At Q1’s end, a total of 37 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably.

Staples (SPLS)According to our comprehensive database, Pzena Investment Management, managed by Richard S. Pzena, holds the most valuable position in Staples, Inc. (NASDAQ:SPLS). Pzena Investment Management has a $523.1 million position in the stock, comprising 3.7% of its 13F portfolio. Sitting at the No. 2 spot is Russell Hawkins of Hawkins Capital, with a $83.5 million position; the fund has 9.2% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, and Donald Yacktman’s Yacktman Asset Management.

Seeing as Staples, Inc. (NASDAQ:SPLS) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds that elected to cut their entire stakes heading into Q2. At the top of the heap, Charles de Vaulx’s International Value Advisers cut the largest investment of the 450+ funds we watch, worth close to $143.3 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund cut about $7.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Staples, Inc. (NASDAQ:SPLS)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Staples, Inc. (NASDAQ:SPLS) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Staples, Inc. (NASDAQ:SPLS). These stocks are HSN, Inc. (NASDAQ:HSNI), Sally Beauty Holdings, Inc. (NYSE:SBH), PetSmart, Inc. (NASDAQ:PETM), and Tractor Supply Company (NASDAQ:TSCO). This group of stocks are the members of the specialty retail, other industry and their market caps are similar to SPLS’s market cap.

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