Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) shareholders have witnessed a decrease in hedge fund interest lately.
In the financial world, there are plenty of indicators shareholders can use to track Mr. Market. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a very impressive amount (see just how much).
Just as key, optimistic insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are plenty of incentives for an insider to drop shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the key action encompassing Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS).
How are hedge funds trading Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS)?
Heading into 2013, a total of 11 of the hedge funds we track were bullish in this stock, a change of -31% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Edward Lampert’s ESL Investments had the biggest position in Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS), worth close to $295.9 million, comprising 7.7% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Jaffe of Force Capital, with a $42.2 million position; the fund has 6.9% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Murray Stahl’s Horizon Asset Management, Debra Fine’s Fine Capital Partners and Steven Cohen’s SAC Capital Advisors.
Because Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) has experienced declining sentiment from the smart money, it’s easy to see that there is a sect of fund managers that elected to cut their entire stakes heading into 2013. Interestingly, Robert Jaffe’s Force Capital dropped the largest investment of the “upper crust” of funds we key on, worth an estimated $14.1 million in stock., and Murray Stahl of Horizon Asset Management was right behind this move, as the fund cut about $5.1 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds heading into 2013.
What have insiders been doing with Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time frame, Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS). These stocks are Alon Holdings Blue Square Israel Ltd (NYSE:BSI), Dillard’s, Inc. (NYSE:DDS), J.C. Penney Company, Inc. (NYSE:JCP), The Bon-Ton Stores, Inc. (NASDAQ:BONT), and Saks Inc (NYSE:SKS). All of these stocks are in the department stores industry and their market caps match SHOS’s market cap.