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Hedge Funds Are Betting On Carter’s, Inc. (NYSE:CRI)

Carter’s, Inc. (NYSE:CRI) has experienced an increase in enthusiasm from smart money in recent months.

If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated investment tools of the past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the bigwigs of this club, close to 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their top investments, we have formulated 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25percentage points in 6.5 month (check out a sample of our picks).

Carter's, Inc. (NYSE:CRI)

Just as integral, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for an executive to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if “monkeys” understand where to look (learn more here).

With all of this in mind, it’s important to take a gander at the key action encompassing Carter’s, Inc. (NYSE:CRI).

How have hedgies been trading Carter’s, Inc. (NYSE:CRI)?

Heading into 2013, a total of 30 of the hedge funds we track held long positions in this stock, a change of 3% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Viking Global, managed by Andreas Halvorsen, holds the biggest position in Carter’s, Inc. (NYSE:CRI). Viking Global has a $208 million billion position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Hoplite Capital Management, managed by John Lykouretzos, which held a $166 million position; 3.1% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Jonathan Auerbach’s Hound Partners, Jonathon Jacobson’s Highfields Capital Management and Chuck Royce’s Royce & Associates.

Consequently, some big names have jumped into Carter’s, Inc. (NYSE:CRI) headfirst. Luxor Capital Group, managed by Christian Leone, established the most outsized position in Carter’s, Inc. (NYSE:CRI). Luxor Capital Group had 90 million invested in the company at the end of the quarter. Scott McLellan’s Marble Arch Investments also initiated a $44 million position during the quarter. The other funds with new positions in the stock are Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management, Larry Foley and Paul Farrell’s Bronson Point Partners, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Carter’s, Inc. (NYSE:CRI)?

Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, Carter’s, Inc. (NYSE:CRI) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the results exhibited by our strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Carter’s, Inc. (NYSE:CRI) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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