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Do Hedge Funds and Insiders Love Urban Outfitters, Inc. (URBN)?

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Is Urban Outfitters, Inc. (NASDAQ:URBN) a buy?

In the eyes of many of your fellow readers, hedge funds are perceived as overrated, outdated financial vehicles of a forgotten age. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey looks at the aristocrats of this group, around 525 funds. It is widely held that this group controls the lion’s share of the smart money’s total assets, and by monitoring their highest performing stock picks, we’ve spotted a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as key, bullish insider trading activity is another way to analyze the stock market universe. Just as you’d expect, there are a number of incentives for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this method if investors understand what to do (learn more here).

Thus, we’re going to analyze the newest info about Urban Outfitters, Inc. (NASDAQ:URBN).

How have hedgies been trading Urban Outfitters, Inc. (NASDAQ:URBN)?

In preparation for the third quarter, a total of 34 of the hedge funds we track were long in this stock, a change of 31% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

Urban Outfitters, Inc. (NASDAQ:URBN)Out of the hedge funds we follow, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in Urban Outfitters, Inc. (NASDAQ:URBN), worth close to $96.6 million, accounting for 0.3% of its total 13F portfolio. On Adage Capital Management’s heels is Tiger Consumer Management, managed by Patrick McCormack, which held a $94.3 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Donald Chiboucis’s Columbus Circle Investors, Jim Simons’s Renaissance Technologies and Steven Cohen’s SAC Capital Advisors.

With a general bullishness amongst the titans, certain money managers have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the biggest position in Urban Outfitters, Inc. (NASDAQ:URBN). Adage Capital Management had 96.6 million invested in the company at the end of the quarter. Patrick McCormack’s Tiger Consumer Management also initiated a $94.3 million position during the quarter. The other funds with new positions in the stock are Donald Chiboucis’s Columbus Circle Investors, Jim Simons’s Renaissance Technologies, and Steven Cohen’s SAC Capital Advisors.

How have insiders been trading Urban Outfitters, Inc. (NASDAQ:URBN)?

Insider buying made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, Urban Outfitters, Inc. (NASDAQ:URBN) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Urban Outfitters, Inc. (NASDAQ:URBN). These stocks are Ascena Retail Group Inc (NASDAQ:ASNA), Nordstrom, Inc. (NYSE:JWN), American Eagle Outfitters (NYSE:AEO), Abercrombie & Fitch Co. (NYSE:ANF), and Foot Locker, Inc. (NYSE:FL). This group of stocks belong to the apparel stores industry and their market caps are similar to URBN’s market cap.

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