Hedge Funds Are Dumping Ralph Lauren Corp (RL)

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Is Ralph Lauren Corp (NYSE:RL) a splendid investment today? Prominent investors are getting less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience

Ralph Lauren Corp

According to most investors, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey look at the leaders of this group, around 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have discovered a number of investment strategies that have historically outstripped 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 began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as beneficial, optimistic insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are many motivations for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).

Consequently, let’s take a peek at the key action surrounding Ralph Lauren Corp (NYSE:RL).

How have hedgies been trading Ralph Lauren Corp (NYSE:RL)?

In preparation for this quarter, a total of 34 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.

Of the funds we track, Lone Pine Capital, managed by Stephen Mandel, holds the largest position in Ralph Lauren Corp (NYSE:RL). Lone Pine Capital has a $534.4 million position in the stock, comprising 2.8% of its 13F portfolio. On Lone Pine Capital’s heels is Blue Ridge Capital, managed by John Griffin, which held a $277.7 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Bain Capital’s Brookside Capital, Lee Ainslie’s Maverick Capital and Panayotis Takis Sparaggis’s Alkeon Capital Management.

Since Ralph Lauren Corp (NYSE:RL) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there were a few hedge funds who sold off their positions entirely last quarter. It’s worth mentioning that Eric Mindich’s Eton Park Capital dumped the largest investment of the “upper crust” of funds we track, valued at about $75 million in stock., and Doug Silverman and Alexander Klabin of Senator Investment Group was right behind this move, as the fund dropped about $75 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Ralph Lauren Corp (NYSE:RL)?

Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the last six-month time frame, Ralph Lauren Corp (NYSE:RL) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Ralph Lauren Corp (NYSE:RL). These stocks are Gildan Activewear Inc (USA) (NYSE:GIL), Under Armour Inc (NYSE:UA), Lululemon Athletica inc. (NASDAQ:LULU), PVH Corp (NYSE:PVH), and V.F. Corporation (NYSE:VFC). This group of stocks are in the textile – apparel clothing industry and their market caps match RL’s market cap.

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