Hedge Funds Are Dumping American Eagle Outfitters (NYSE:AEO)

American Eagle Outfitters (NYSE:AEO) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late.

Most Popular Apparel Stocks

If you’d ask most market participants, hedge funds are assumed to be worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading at present, we look at the bigwigs of this group, around 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by paying attention to their highest performing equity investments, we have deciphered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as beneficial, optimistic insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are a variety of reasons for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).

With these “truths” under our belt, we’re going to take a peek at the recent action encompassing American Eagle Outfitters (NYSE:AEO).

How have hedgies been trading American Eagle Outfitters (NYSE:AEO)?

At year’s end, a total of 26 of the hedge funds we track were long in this stock, a change of -4% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in American Eagle Outfitters (NYSE:AEO). Royce & Associates has a $201 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $57 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Donald Chiboucis’s Columbus Circle Investors.

Because American Eagle Outfitters (NYSE:AEO) has witnessed falling interest from hedge fund managers, it’s easy to see that there exists a select few fund managers who sold off their positions entirely heading into 2013. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management sold off the largest position of the “upper crust” of funds we watch, valued at close to $3 million in stock.. James Pallotta’s fund, Raptor Capital Management, also cut its stock, about $2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds heading into 2013.

What do corporate executives and insiders think about American Eagle Outfitters (NYSE:AEO)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, American Eagle Outfitters (NYSE:AEO) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and American Eagle Outfitters (NYSE:AEO) applies perfectly to this mantra.

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.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!