RadioShack Corporation (NYSE:RSH) has experienced a decrease in hedge fund interest of late.
According to most shareholders, hedge funds are perceived as underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the crème de la crème of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by tracking their best investments, we have uncovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see the details here).
Equally as key, bullish insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are plenty of incentives for an insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).
With all of this in mind, let’s take a gander at the latest action regarding RadioShack Corporation (NYSE:RSH).
Hedge fund activity in RadioShack Corporation (NYSE:RSH)
Heading into 2013, a total of 14 of the hedge funds we track held long positions in this stock, a change of -13% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably.
Of the funds we track, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in RadioShack Corporation (NYSE:RSH). AQR Capital Management has a $4 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Francis Chou of Chou Associates Management, with a $3 million position; 0% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Richard C. Patton’s Courage Capital.
Since RadioShack Corporation (NYSE:RSH) has experienced a declination in interest from the smart money, we can see that there is a sect of fund managers who were dropping their positions entirely in Q4. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of the 450+ funds we key on, comprising an estimated $1 million in stock., and David Costen Haley of HBK Investments was right behind this move, as the fund dropped about $1 million worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds in Q4.
How are insiders trading RadioShack Corporation (NYSE:RSH)?
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, RadioShack Corporation (NYSE:RSH) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results exhibited by our strategies, retail investors must always watch hedge fund and insider trading activity, and RadioShack Corporation (NYSE:RSH) is no exception.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.