Sears Hometown and Outlet Stores Inc (SHOS): What Fellow Hedgies Think of Lampert’s Sears Spinoff

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Due to the fact that Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) has witnessed a declination in interest from the aggregate hedge fund industry, we can see that there is a sect of funds that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Glenn Russell Dubin’s Highbridge Capital Management said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $0.4 million in stock, and Mike Vranos’ Ellington was right behind this move, as the fund sold off about $0.3 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) but similarly valued. We will take a look at Geospace Technologies Corp (NASDAQ:GEOS), Evolution Petroleum Corporation (NYSEMKT:EPM), MFC Industrial Ltd (NYSE:MIL), and Repros Therapeutics Inc (NASDAQ:RPRX). This group of stocks’ market valuations resemble SHOS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GEOS 5 17620 -1
EPM 5 9828 0
MIL 4 2062 -2
RPRX 17 44493 -2

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $78 million in SHOS’s case. Repros Therapeutics Inc (NASDAQ:RPRX) is the most popular stock in this table. On the other hand MFC Industrial Ltd (NYSE:MIL) is the least popular one with only 4 bullish hedge fund positions. Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) is not the most popular stock in this group but hedge fund interest is still above average and there is more money invested in it than in any of the other stocks, although about half of that is from Lampert’s aforementioned position, which has been drastically cut since the company’s spinoff from Sears Holdings in 2012. Nonetheless, this is a slightly positive signal, and both SHOS and RPRX might be good candidates to consider long positions in.

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