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Hedge Funds Are Dumping The Men’s Wearhouse, Inc. (MW): Ann Inc (ANN), Guess?, Inc. (GES)

The Men’s Wearhouse, Inc. (NYSE:MW) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. MW has experienced a decrease in support from the world’s most elite money managers in recent months. There were 13 hedge funds in our database with MW holdings at the end of the previous quarter.

The Men's Wearhouse, Inc. (NYSE:MW)

To most investors, hedge funds are assumed to be underperforming, outdated investment vehicles of yesteryear. While there are over 8000 funds with their doors open today, we hone in on the leaders of this club, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total capital, and by tracking their best investments, we have uncovered a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as beneficial, bullish insider trading activity is another way to break down the marketplace. Obviously, there are lots of motivations for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).

Consequently, let’s take a glance at the latest action regarding The Men’s Wearhouse, Inc. (NYSE:MW).

How are hedge funds trading The Men’s Wearhouse, Inc. (NYSE:MW)?

Heading into 2013, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.

According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in The Men’s Wearhouse, Inc. (NYSE:MW). Fisher Asset Management has a $55 million position in the stock, comprising 0.2% of its 13F portfolio. On Fisher Asset Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $37 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Glenn J. Krevlin’s Glenhill Advisors, Ken Griffin’s Citadel Investment Group and Neil Chriss’s Hutchin Hill Capital.

Since The Men’s Wearhouse, Inc. (NYSE:MW) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that David Keidan’s Buckingham Capital Management dropped the largest position of the 450+ funds we key on, comprising about $5 million in stock., and Glenn J. Krevlin of Glenhill Advisors was right behind this move, as the fund dumped about $3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about The Men’s Wearhouse, Inc. (NYSE:MW)?

Insider buying is best served when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, The Men’s Wearhouse, Inc. (NYSE:MW) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to The Men’s Wearhouse, Inc. (NYSE:MW). These stocks are Ann Inc (NYSE:ANN), Guess?, Inc. (NYSE:GES), Genesco Inc. (NYSE:GCO), Express, Inc. (NYSE:EXPR), and Wacoal Holdings Corporation (ADR) (NASDAQ:WACLY). This group of stocks are in the apparel stores industry and their market caps match MW’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Ann Inc (NYSE:ANN) 20 1 2
Guess?, Inc. (NYSE:GES) 9 0 1
Genesco Inc. (NYSE:GCO) 14 0 3
Express, Inc. (NYSE:EXPR) 21 0 1
Wacoal Holdings Corporation (ADR) (NASDAQ:WACLY) 1 0 0

With the results demonstrated by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading activity, and The Men’s Wearhouse, Inc. (NYSE:MW) is no exception.

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