Is Ralph Lauren Corp (NYSE:RL) going to take off soon? The smart money is becoming more confident. The number of bullish hedge fund bets went up by 3 in recent months.
To most stock holders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey look at the leaders of this group, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds' total asset base, and by tracking their highest performing investments, we have unsheathed a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as beneficial, positive insider trading activity is a second way to parse down the investments you're interested in. As the old adage goes: there are lots of stimuli for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this strategy if "monkeys" know what to do (learn more here).
Consequently, we're going to take a peek at the latest action encompassing Ralph Lauren Corp (NYSE:RL).
Heading into 2013, a total of 31 of the hedge funds we track were long in this stock, a change of 11% from the previous quarter. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Stephen Mandel's Lone Pine Capital had the biggest position in Ralph Lauren Corp (NYSE:RL), worth close to $590 million billion, comprising 3.7% of its total 13F portfolio. On Lone Pine Capital's heels is Maverick Capital, managed by Lee Ainslie, which held a $272 million position; 1.6% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include John Griffin's Blue Ridge Capital, Bain Capital's Brookside Capital and Steven Cohen's SAC Capital Advisors.
As aggregate interest increased, some big names were leading the bulls' herd. Senator Investment Group, managed by Doug Silverman, assembled the most valuable position in Ralph Lauren Corp (NYSE:RL). Senator Investment Group had 75 million invested in the company at the end of the quarter. also made a $75 million investment in the stock during the quarter. The other funds with new positions in the stock are Panayotis æTakisÆ Sparaggis's Alkeon Capital Management, Lee Hobson's Highside Capital Management, and Larry Foley and Paul Farrell's Bronson Point Partners.
Insider trading activity, especially when it's bullish, is best served when the company in question has seen transactions within the past 180 days. Over the latest half-year time frame, Ralph Lauren Corp (NYSE:RL) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the results shown by our studies, retail investors must always monitor hedge fund and insider trading sentiment, and Ralph Lauren Corp (NYSE:RL) shareholders fit into this picture quite nicely.
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