CONN'S, Inc. (NASDAQ:CONN) has seen a decrease in hedge fund interest in recent months.
In today’s marketplace, there are dozens of gauges market participants can use to monitor the equity markets. A pair of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can beat the S&P 500 by a very impressive amount (see just how much).
Equally as beneficial, positive insider trading activity is a second way to break down the stock market universe. Obviously, there are plenty of incentives for an insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if "monkeys" know where to look (learn more here).
With all of this in mind, let's take a gander at the key action regarding CONN'S, Inc. (NASDAQ:CONN).
In preparation for this year, a total of 14 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Alydar Capital, managed by John Murphy, holds the largest position in CONN'S, Inc. (NASDAQ:CONN). Alydar Capital has a $30 million position in the stock, comprising 2.3% of its 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $25 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Richard Driehaus's Driehaus Capital, Alexander Mitchell's Scopus Asset Management and Jeffrey Vinik's Vinik Asset Management.
Because CONN'S, Inc. (NASDAQ:CONN) has witnessed falling interest from hedge fund managers, it's easy to see that there is a sect of money managers that elected to cut their positions entirely heading into 2013. At the top of the heap, Israel Englander's Millennium Management sold off the biggest investment of the 450+ funds we watch, worth close to $4 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund sold off about $1 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the latest six-month time frame, CONN'S, Inc. (NASDAQ:CONN) has experienced zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to CONN'S, Inc. (NASDAQ:CONN). These stocks are Best Buy Co., Inc. (NYSE:BBY), RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), , and GameStop Corp. (NYSE:GME). This group of stocks are the members of the electronics stores industry and their market caps are similar to CONN's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Best Buy Co., Inc. (NYSE:BBY)||29||1||0|
|RadioShack Corporation (NYSE:RSH)||14||1||0|
|hhgregg, Inc. (NYSE:HGG)||10||0||2|
|GameStop Corp. (NYSE:GME)||21||0||1|
With the returns demonstrated by our time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and CONN'S, Inc. (NASDAQ:CONN) shareholders fit into this picture quite nicely.