Chico's FAS, Inc. (NYSE:CHS) has experienced an increase in activity from the world's largest hedge funds lately.
If you'd ask most market participants, hedge funds are seen as worthless, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation today, we at Insider Monkey look at the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on the lion's share of the hedge fund industry's total asset base, and by watching their highest performing picks, we have deciphered a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, bullish insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are a variety of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, let's take a peek at the key action encompassing Chico's FAS, Inc. (NYSE:CHS).
In preparation for this quarter, a total of 27 of the hedge funds we track were long in this stock, a change of 13% from the first quarter. With the smart money's capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Blue Harbour Group, managed by Clifton S. Robbins, holds the largest position in Chico's FAS, Inc. (NYSE:CHS). Blue Harbour Group has a $94.7 million position in the stock, comprising 9.7% of its 13F portfolio. On Blue Harbour Group's heels is Renaissance Technologies, managed by Jim Simons, which held a $89.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Ken Griffin's Citadel Investment Group, Patrick McCormack's Tiger Consumer Management and Donald Chiboucis's Columbus Circle Investors.
Consequently, key money managers have been driving this bullishness. Tiger Consumer Management, managed by Patrick McCormack, assembled the most outsized position in Chico's FAS, Inc. (NYSE:CHS). Tiger Consumer Management had 46.9 million invested in the company at the end of the quarter. Curtis Macnguyen's Ivory Capital (Investment Mgmt) also made a $7.8 million investment in the stock during the quarter. The following funds were also among the new CHS investors: Curtis Macnguyen's Ivory Capital (Investment Mgmt), Alexander Mitchell's Scopus Asset Management, and Matthew Tewksbury's Stevens Capital Management.
Bullish insider trading is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Chico's FAS, Inc. (NYSE:CHS) has experienced zero unique insiders buying, and 9 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 Chico's FAS, Inc. (NYSE:CHS). These stocks are American Eagle Outfitters (NYSE:AEO), Guess?, Inc. (NYSE:GES), The Buckle, Inc. (NYSE:BKE), Ascena Retail Group Inc (NASDAQ:ASNA), and DSW Inc. (NYSE:DSW). This group of stocks belong to the apparel stores industry and their market caps resemble CHS's market cap.