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Natural Grocers by Vitamin Cottage Inc (NGVC): Are Hedge Funds Right About This Stock?

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Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) investors should pay attention to an increase in hedge fund sentiment in recent months.

According to most stock holders, hedge funds are seen as worthless, old investment tools of yesteryear. While there are more than 8000 funds trading today, we at Insider Monkey choose to focus on the masters of this club, close to 450 funds. It is estimated that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their top picks, we have unsheathed a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as key, positive insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are many stimuli for an insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the key action regarding Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC).

What have hedge funds been doing with Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC)?

In preparation for this quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of 29% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Donald Chiboucis’s Columbus Circle Investors had the biggest position in Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC), worth close to $12.7 million, comprising 0.1% of its total 13F portfolio. On Columbus Circle Investors’s heels is Alydar Capital, managed by John Murphy, which held a $8.7 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include John Brennan’s Sirios Capital Management, Pasco Alfaro / Richard Tumure’s Miura Global Management and Israel Englander’s Millennium Management.

As industrywide interest jumped, some big names were leading the bulls’ herd. Miura Global Management, managed by Pasco Alfaro / Richard Tumure, initiated the most outsized position in Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). Miura Global Management had 4.6 million invested in the company at the end of the quarter. Abby Flamholz and Yehuda Blinder’s ADAR Investment Management also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new NGVC position is Tom Russo’s Gardner Russo & Gardner.

What have insiders been doing with Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past six months. Over the last six-month time period, Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) has experienced 1 unique insiders purchasing, 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 Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). These stocks are Roundy’s Inc (NYSE:RNDY), Arden Group, Inc. (NASDAQ:ARDNA), Village Super Market, Inc. (NASDAQ:VLGEA), Core-Mark Holding Company, Inc. (NASDAQ:CORE), and Ingles Markets, Incorporated (NASDAQ:IMKTA). This group of stocks are the members of the grocery stores industry and their market caps match NGVC’s market cap.

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