Aeropostale, Inc. (NYSE:ARO) investors should pay attention to an increase in activity from the world’s largest hedge funds of late.
According to most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of the past. While there are over 8000 funds in operation today, we look at the bigwigs of this group, about 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by keeping an eye on their best equity investments, we have brought to light a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. Obviously, there are lots of incentives for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a glance at the key action surrounding Aeropostale, Inc. (NYSE:ARO).
How are hedge funds trading Aeropostale, Inc. (NYSE:ARO)?
At year’s end, a total of 27 of the hedge funds we track were bullish in this stock, a change of 42% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in Aeropostale, Inc. (NYSE:ARO). Pzena Investment Management has a $27 million billion position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $22 million position; 1.5% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Anthony Bozza’s Lakewood Capital Management.
As aggregate interest increased, specific money managers have been driving this bullishness. Sheffield Asset Management, managed by Craig C. Albert, created the most valuable position in Aeropostale, Inc. (NYSE:ARO). Sheffield Asset Management had 5 million invested in the company at the end of the quarter. John Murphy’s Alydar Capital also made a $4 million investment in the stock during the quarter. The following funds were also among the new ARO investors: Mark Kingdon’s Kingdon Capital and Neil Chriss’s Hutchin Hill Capital.
How are insiders trading Aeropostale, Inc. (NYSE:ARO)?
Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Aeropostale, Inc. (NYSE:ARO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s studies, retail investors must always keep an eye on hedge fund and insider trading activity, and Aeropostale, Inc. (NYSE:ARO) applies perfectly to this mantra.
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