Regis Corporation (NYSE:RGS) investors should pay attention to a decrease in hedge fund interest recently.
In the eyes of most investors, hedge funds are perceived as underperforming, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey look at the aristocrats of this group, close to 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total capital, and by tracking their highest performing picks, we have come up with a number of investment strategies that have historically outpaced Mr. Market. 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 trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as beneficial, bullish insider trading sentiment is another way to parse down the marketplace. There are a number of incentives for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the recent action encompassing Regis Corporation (NYSE:RGS).
How have hedgies been trading Regis Corporation (NYSE:RGS)?
In preparation for this year, a total of 11 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Yale M. Fergang and Robert W. Medway’s Royal Capital had the largest position in Regis Corporation (NYSE:RGS), worth close to $19 million, comprising 4.7% of its total 13F portfolio. Coming in second is Starboard Value LP, managed by Jeffrey Smith, which held a $16.4 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Chuck Royce’s Royce & Associates, D. E. Shaw’s D E Shaw and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Because Regis Corporation (NYSE:RGS) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of fund managers that decided to sell off their full holdings last quarter. It’s worth mentioning that Michael Blitzer’s Kingstown Capital Management dropped the largest position of the 450+ funds we key on, totaling close to $27.6 million in stock.. Mark Travis’s fund, Intrepid Capital Management, also sold off its stock, about $5.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter.
How are insiders trading Regis Corporation (NYSE:RGS)?
Insider buying is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Regis Corporation (NYSE:RGS) has experienced 4 unique insiders buying, and zero 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 Regis Corporation (NYSE:RGS). These stocks are VCA Antech Inc (NASDAQ:WOOF), eLong, Inc. (ADR) (NASDAQ:LONG), Steiner Leisure Ltd (NASDAQ:STNR), and Stewart Enterprises, Inc. (NASDAQ:STEI). This group of stocks are in the personal services industry and their market caps resemble RGS’s market cap.