In the eyes of most shareholders, hedge funds are viewed as slow, old financial tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey look at the crème de la crème of this group, about 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their top investments, we have deciphered a number of investment strategies that have historically outpaced the 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 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 (explore the details and some picks here).
Equally as key, optimistic insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are a variety of incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).
Now, let’s take a look at the latest action regarding J.C. Penney Company, Inc. (NYSE:JCP).
How have hedgies been trading J.C. Penney Company, Inc. (NYSE:JCP)?
At Q1’s end, a total of 36 of the hedge funds we track were long in this stock, a change of 9% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Pershing Square, managed by Bill Ackman, holds the largest position in J.C. Penney Company, Inc. (NYSE:JCP). Pershing Square has a $590.4 million position in the stock, comprising 5.9% of its 13F portfolio. Coming in second is Glenview Capital, managed by Larry Robbins, which held a $144.4 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, and Patrick McCormack’s Tiger Consumer Management.
Now, some big names were breaking ground themselves. Tiger Global Management LLC, managed by Chase Coleman and Feroz Dewan, assembled the biggest position in J.C. Penney Company, Inc. (NYSE:JCP). Tiger Global Management LLC had 80.8 million invested in the company at the end of the quarter. Christian Leone’s Luxor Capital Group also made a $68 million investment in the stock during the quarter. The other funds with brand new JCP positions are Patrick McCormack’s Tiger Consumer Management, Ken Griffin’s Citadel Investment Group, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
What do corporate executives and insiders think about J.C. Penney Company, Inc. (NYSE:JCP)?
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time frame, J.C. Penney Company, Inc. (NYSE:JCP) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to J.C. Penney Company, Inc. (NYSE:JCP). These stocks are Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS), Kohl’s Corporation (NYSE:KSS), Saks Inc (NYSE:SKS), Sears Holdings Corporation (NASDAQ:SHLD), and Dillard’s, Inc. (NYSE:DDS). This group of stocks are in the department stores industry and their market caps are similar to JCP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) | 14 | 1 | 0 |
| Kohl’s Corporation (NYSE:KSS) | 23 | 1 | 3 |
| Saks Inc (NYSE:SKS) | 13 | 0 | 6 |
| Sears Holdings Corporation (NASDAQ:SHLD) | 19 | 2 | 2 |
| Dillard’s, Inc. (NYSE:DDS) | 21 | 0 | 3 |
With the returns exhibited by our time-tested strategies, everyday investors must always watch hedge fund and insider trading activity, and J.C. Penney Company, Inc. (NYSE:JCP) applies perfectly to this mantra.
