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Hedge Funds Are Selling First Cash Financial Services, Inc. (FCFS)

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First Cash Financial Services, Inc. (NASDAQ:FCFS) was in 7 hedge funds’ portfolio at the end of December. FCFS investors should be aware of a decrease in support from the world’s most elite money managers of late. There were 9 hedge funds in our database with FCFS positions at the end of the previous quarter.

First Cash Financial Services, Inc. (NASDAQ:FCFS)

In the eyes of most investors, hedge funds are seen as slow, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the elite of this group, about 450 funds. It is estimated that this group oversees most of the smart money’s total asset base, and by keeping an eye on their best stock picks, we have figured out a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as key, optimistic insider trading sentiment is a second way to parse down the marketplace. Just as you’d expect, there are a variety of motivations for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).

With all of this in mind, it’s important to take a peek at the recent action regarding First Cash Financial Services, Inc. (NASDAQ:FCFS).

Hedge fund activity in First Cash Financial Services, Inc. (NASDAQ:FCFS)

In preparation for this year, a total of 7 of the hedge funds we track were bullish in this stock, a change of -22% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably.

According to our comprehensive database, White Elm Capital, managed by Matthew Iorio, holds the largest position in First Cash Financial Services, Inc. (NASDAQ:FCFS). White Elm Capital has a $16 million position in the stock, comprising 3.3% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $10.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Ken Grossman and Glen Schneider’s SG Capital Management, Dmitry Balyasny’s Balyasny Asset Management and Andy Redleaf’s Whitebox Advisors.

Judging by the fact that First Cash Financial Services, Inc. (NASDAQ:FCFS) has faced falling interest from the smart money, it’s safe to say that there is a sect of funds that elected to cut their entire stakes heading into 2013. At the top of the heap, Steven Richman’s East Side Capital (RR Partners) sold off the largest stake of all the hedgies we track, totaling close to $7.3 million in stock., and Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners was right behind this move, as the fund sold off about $0.3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds heading into 2013.

How are insiders trading First Cash Financial Services, Inc. (NASDAQ:FCFS)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, First Cash Financial Services, Inc. (NASDAQ:FCFS) 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 First Cash Financial Services, Inc. (NASDAQ:FCFS). These stocks are World Acceptance Corp. (NASDAQ:WRLD), PHH Corporation (NYSE:PHH), CapitalSource, Inc. (NYSE:CSE), Cash America International, Inc. (NYSE:CSH), and Nelnet, Inc. (NYSE:NNI). All of these stocks are in the credit services industry and their market caps resemble FCFS’s market cap.

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