Finish Line Inc (NASDAQ:FINL) has experienced a decrease in hedge fund sentiment in recent months.
To the average investor, there are many metrics shareholders can use to track publicly traded companies. Some of the best 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 investment managers can trounce the broader indices by a solid margin (see just how much).
Equally as key, optimistic insider trading activity is a second way to parse down the investments you're interested in. There are a number of incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Consequently, let's take a look at the recent action encompassing Finish Line Inc (NASDAQ:FINL).
At the end of the fourth quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of -6% from the previous quarter. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Finish Line Inc (NASDAQ:FINL). Royce & Associates has a $97 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Hawkeye Capital, managed by Richard Rubin, which held a $33 million position; the fund has 16.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ken Griffin's Citadel Investment Group, David Keidan's Buckingham Capital Management and D. E. Shaw's D E Shaw.
Due to the fact that Finish Line Inc (NASDAQ:FINL) has witnessed bearish sentiment from the smart money, logic holds that there lies a certain "tier" of hedge funds that slashed their full holdings in Q4. Interestingly, Steven Cohen's SAC Capital Advisors dumped the biggest stake of the 450+ funds we key on, valued at close to $39 million in stock., and Eric Sprott of Sprott Asset Management was right behind this move, as the fund dumped about $4 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds in Q4.
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the last half-year time period, Finish Line Inc (NASDAQ:FINL) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Finish Line Inc (NASDAQ:FINL). These stocks are Francesca's Holdings Corp (NASDAQ:FRAN), EZCORP Inc (NASDAQ:EZPW), Office Depot Inc (NYSE:ODP), OfficeMax Inc (NYSE:OMX), and Barnes & Noble, Inc. (NYSE:BKS). This group of stocks belong to the specialty retail, other industry and their market caps are similar to FINL's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Francesca's Holdings Corp (NASDAQ:FRAN)||21||4||1|
|EZCORP Inc (NASDAQ:EZPW)||15||0||2|
|Office Depot Inc (NYSE:ODP)||15||5||0|
|OfficeMax Inc (NYSE:OMX)||18||0||1|
|Barnes & Noble, Inc. (NYSE:BKS)||18||0||3|
With the results shown by the aforementioned strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Finish Line Inc (NASDAQ:FINL) is an important part of this process.