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Is Resources Connection, Inc. (RECN) Going to Burn These Hedge Funds?

Resources Connection, Inc. (NASDAQ:RECN) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. RECN investors should pay attention to a decrease in hedge fund interest of late. There were 13 hedge funds in our database with RECN holdings at the end of the previous quarter.

According to most investors, hedge funds are perceived as slow, old financial tools of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the aristocrats of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by tracking their highest performing investments, we have figured out a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Resources Connection, Inc. (NASDAQ:RECN)Just as beneficial, bullish insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are many incentives for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).

Now, let’s take a peek at the latest action regarding Resources Connection, Inc. (NASDAQ:RECN).

How are hedge funds trading Resources Connection, Inc. (NASDAQ:RECN)?

At Q1’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -23% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the largest position in Resources Connection, Inc. (NASDAQ:RECN). AQR Capital Management has a $6.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $6.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Due to the fact that Resources Connection, Inc. (NASDAQ:RECN) has faced a declination in interest from the smart money, we can see that there was a specific group of funds that elected to cut their entire stakes at the end of the first quarter. Intriguingly, Jim Simons’s Renaissance Technologies dumped the biggest investment of all the hedgies we watch, valued at close to $3.8 million in stock., and Ken Grossman and Glen Schneider of SG Capital Management was right behind this move, as the fund cut about $0.8 million worth. These moves are interesting, as total hedge fund interest dropped by 3 funds at the end of the first quarter.

What have insiders been doing with Resources Connection, Inc. (NASDAQ:RECN)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last six-month time frame, Resources Connection, Inc. (NASDAQ:RECN) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the returns exhibited by Insider Monkey’s tactics, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Resources Connection, Inc. (NASDAQ:RECN) applies perfectly to this mantra.

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