Is Vitamin Shoppe Inc (NYSE:VSI) a first-rate stock to buy now? Prominent investors are becoming more confident. The number of long hedge fund bets improved by 1 recently.
If you'd ask most traders, hedge funds are perceived as unimportant, old investment vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. Most estimates calculate that this group oversees most of all hedge funds' total capital, and by monitoring their highest performing equity investments, we have revealed a few investment strategies that have historically outpaced the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as key, bullish insider trading activity is another way to parse down the investments you're interested in. There are plenty of stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).
With these "truths" under our belt, let's take a look at the latest action surrounding Vitamin Shoppe Inc (NYSE:VSI).
At year's end, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from one quarter earlier. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Columbus Circle Investors, managed by Donald Chiboucis, holds the most valuable position in Vitamin Shoppe Inc (NYSE:VSI). Columbus Circle Investors has a $43 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $12 million position; 0.8% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include John Murphy's Alydar Capital, Paul Tudor Jones's Tudor Investment Corp and Israel Englander's Millennium Management.
As one would reasonably expect, key hedge funds have been driving this bullishness. Alydar Capital, managed by John Murphy, initiated the most outsized position in Vitamin Shoppe Inc (NYSE:VSI). Alydar Capital had 10 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $4 million investment in the stock during the quarter. The only other fund with a brand new VSI position is Ken Griffin's Citadel Investment Group.
Insider trading activity, especially when it's bullish, is best served when the company in question has seen transactions within the past half-year. Over the last 180-day time period, Vitamin Shoppe Inc (NYSE:VSI) has experienced 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the results shown by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Vitamin Shoppe Inc (NYSE:VSI) is an important part of this process.
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.