Limited Brands, Inc. (LTD): Insiders Aren’t Crazy About It

Limited Brands, Inc. (NYSE:LTD) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months.

To most traders, hedge funds are seen as unimportant, old investment tools of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey choose to focus on the moguls of this group, about 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by watching their highest performing equity investments, we have identified a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as integral, bullish insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are many incentives for an executive to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

With all of this in mind, we’re going to take a glance at the recent action regarding Limited Brands, Inc. (NYSE:LTD).

Hedge fund activity in Limited Brands, Inc. (NYSE:LTD)

In preparation for this quarter, a total of 14 of the hedge funds we track were long in this stock, a change of -39% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

Of the funds we track, Paul Ruddock and Steve Heinz’s Lansdowne Partners had the largest position in Limited Brands, Inc. (NYSE:LTD), worth close to $72.1 million, comprising 1% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $63.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Sanford J. Colen’s Apex Capital, Jim Simons’s Renaissance Technologies and Curtis Macnguyen’s Ivory Capital (Investment Mgmt).

Since Limited Brands, Inc. (NYSE:LTD) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that slashed their full holdings last quarter. Intriguingly, Donald Chiboucis’s Columbus Circle Investors said goodbye to the largest stake of the “upper crust” of funds we watch, valued at an estimated $76.4 million in stock.. Murray Stahl’s fund, Horizon Asset Management, also cut its stock, about $66.2 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 9 funds last quarter.

Insider trading activity in Limited Brands, Inc. (NYSE:LTD)

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past 180 days. Over the last 180-day time period, Limited Brands, Inc. (NYSE:LTD) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Limited Brands, Inc. (NYSE:LTD). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Nordstrom, Inc. (NYSE:JWN), Michael Kors Holdings Ltd (NYSE:KORS), and Ross Stores, Inc. (NASDAQ:ROST). All of these stocks are in the apparel stores industry and their market caps resemble LTD’s market cap.

Company Name	# of Hedge Funds	# of Insiders Buying	# of Insiders Selling
Urban Outfitters, Inc. (NASDAQ:URBN)	26	0	5
The Gap Inc. (NYSE:GPS)	26	0	7
Nordstrom, Inc. (NYSE:JWN)	24	0	9
Michael Kors Holdings Ltd (NYSE:KORS)	49	0	0
Ross Stores, Inc. (NASDAQ:ROST)	34	0	7

With the results exhibited by our studies, retail investors should always pay attention to hedge fund and insider trading activity, and Limited Brands, Inc. (NYSE:LTD) applies perfectly to this mantra.

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