Is 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN) a cheap investment today? Prominent investors are becoming less hopeful. The number of long hedge fund positions retreated by 2 lately.
In today’s marketplace, there are plenty of metrics investors can use to track the equity markets. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the market by a superb amount (see just how much).
Just as important, positive insider trading activity is another way to parse down the financial markets. Just as you'd expect, there are a number of motivations for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
With all of this in mind, let's take a gander at the recent action regarding 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN).
At the end of the first quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -17% from one quarter earlier. With the smart money's sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Tremblant Capital, managed by Brett Barakett, holds the biggest position in 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN). Tremblant Capital has a $11.2 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $6.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include D. E. Shaw's D E Shaw, James Dinan's York Capital Management and Spencer M. Waxman's Shannon River Fund Management.
Since 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN) has experienced declining sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of hedgies who were dropping their entire stakes at the end of the first quarter. Intriguingly, John Overdeck and David Siegel's Two Sigma Advisors sold off the largest stake of the 450+ funds we monitor, valued at close to $0.4 million in stock.. John Arnold's fund, Centaurus Advisors, also said goodbye to its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 2 funds at the end of the first quarter.
Insider purchases made by high-level executives is most useful when the company we're looking at has seen transactions within the past 180 days. Over the last six-month time period, 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN). These stocks are Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), Morgans Hotel Group Co. (NASDAQ:MHGC), Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN), Orient-Express Hotels Ltd. (NYSE:OEH), and China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). This group of stocks are the members of the lodging industry and their market caps are similar to SVN's market cap.