Regis Corporation (NYSE:RGS) has seen a decrease in activity from the world’s largest hedge funds of late.
To most traders, hedge funds are assumed to be worthless, outdated investment vehicles of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey look at the masters of this club, close to 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by monitoring their highest performing equity investments, we have figured out a number of investment strategies that have historically outperformed the market. 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, positive insider trading activity is a second way to break down the stock market universe. As the old adage goes: there are a number of stimuli for an executive to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).
Consequently, it’s important to take a gander at the key action surrounding Regis Corporation (NYSE:RGS).
What have hedge funds been doing with Regis Corporation (NYSE:RGS)?
At the end of the first quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.
Of the funds we track, Royal Capital, managed by Yale M. Fergang and Robert W. Medway, holds the most valuable position in Regis Corporation (NYSE:RGS). Royal Capital has a $26.7 million position in the stock, comprising 6.5% of its 13F portfolio. On Royal Capital’s heels is Jeffrey Smith of Starboard Value LP, with a $17.7 million position; 1.6% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include D. E. Shaw’s D E Shaw, Chuck Royce’s Royce & Associates and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC.
Due to the fact that Regis Corporation (NYSE:RGS) has witnessed a declination in interest from the aggregate hedge fund industry, we can see that there exists a select few fund managers who sold off their full holdings at the end of the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of the “upper crust” of funds we track, comprising an estimated $6.5 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $2.6 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 do corporate executives and insiders think about Regis Corporation (NYSE:RGS)?
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Regis Corporation (NYSE:RGS) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Regis Corporation (NYSE:RGS). These stocks are VCA Antech Inc (NASDAQ:WOOF), eLong, Inc. (ADR) (NASDAQ:LONG), Steiner Leisure Ltd (NASDAQ:STNR), Stewart Enterprises, Inc. (NASDAQ:STEI), and G&K Services Inc (NASDAQ:GK). All of these stocks are in the personal services industry and their market caps are similar to RGS’s market cap.