Ethan Allen Interiors Inc. (NYSE:ETH) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. ETH shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with ETH positions at the end of the previous quarter.
At the moment, there are tons of indicators investors can use to track stocks. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid amount (see just how much).
Just as key, optimistic insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are many reasons for an insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).
Keeping this in mind, let’s take a gander at the key action surrounding Ethan Allen Interiors Inc. (NYSE:ETH).
How are hedge funds trading Ethan Allen Interiors Inc. (NYSE:ETH)?
At year’s end, a total of 11 of the hedge funds we track held long positions in this stock, a change of 38% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Ethan Allen Interiors Inc. (NYSE:ETH). Royce & Associates has a $96 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Jeffrey Vinik of Vinik Asset Management, with a $9 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Donald Chiboucis’s Columbus Circle Investors.
As aggregate interest increased, key hedge funds have jumped into Ethan Allen Interiors Inc. (NYSE:ETH) headfirst. Vinik Asset Management, managed by Jeffrey Vinik, initiated the most outsized position in Ethan Allen Interiors Inc. (NYSE:ETH). Vinik Asset Management had 9 million invested in the company at the end of the quarter. Donald Chiboucis’s Columbus Circle Investors also initiated a $3 million position during the quarter. The other funds with brand new ETH positions are Mario Gabelli’s GAMCO Investors, Charles Davidson’s Wexford Capital, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
What do corporate executives and insiders think about Ethan Allen Interiors Inc. (NYSE:ETH)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Ethan Allen Interiors Inc. (NYSE:ETH) has seen zero unique insiders purchasing, and 15 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Ethan Allen Interiors Inc. (NYSE:ETH). These stocks are Tempur-Pedic International Inc. (NYSE:TPX), American Woodmark Corporation (NASDAQ:AMWD), Mattress Firm Holding Corp (NASDAQ:MFRM), Select Comfort Corp. (NASDAQ:SCSS), and La-Z-Boy Incorporated (NYSE:LZB). This group of stocks are the members of the home furnishings & fixtures industry and their market caps are similar to ETH’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Tempur-Pedic International Inc. (NYSE:TPX)||15||1||3|
|American Woodmark Corporation (NASDAQ:AMWD)||9||0||4|
|Mattress Firm Holding Corp (NASDAQ:MFRM)||8||0||8|
|Select Comfort Corp. (NASDAQ:SCSS)||16||0||3|
|La-Z-Boy Incorporated (NYSE:LZB)||11||0||5|
With the returns exhibited by the aforementioned time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Ethan Allen Interiors Inc. (NYSE:ETH) is an important part of this process.