The Gap Inc. (NYSE:GPS) has experienced a decrease in enthusiasm from smart money recently.
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Equally as important, positive insider trading sentiment is another way to parse down the world of equities. There are many reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
Consequently, it’s important to take a peek at the latest action encompassing The Gap Inc. (NYSE:GPS).
What does the smart money think about The Gap Inc. (NYSE:GPS)?
In preparation for this year, a total of 29 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Stephen Mandel’s Lone Pine Capital had the biggest position in The Gap Inc. (NYSE:GPS), worth close to $575.1 million, comprising 3.6% of its total 13F portfolio. Sitting at the No. 2 spot is Edward Lampert of ESL Investments, with a $444.5 million position; the fund has 11.6% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Jim Simons’s Renaissance Technologies and Jean-Marie Eveillard’s First Eagle Investment Management.
Due to the fact that The Gap Inc. (NYSE:GPS) has experienced a declination in interest from hedge fund managers, logic holds that there exists a select few funds who sold off their positions entirely last quarter. Intriguingly, Donald Chiboucis’s Columbus Circle Investors dropped the largest stake of the “upper crust” of funds we key on, valued at an estimated $67.4 million in stock.. Panayotis æTakisÆ Sparaggis’s fund, Alkeon Capital Management, also cut its stock, about $58.6 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading The Gap Inc. (NYSE:GPS)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, The Gap Inc. (NYSE:GPS) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to The Gap Inc. (NYSE:GPS). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), Nordstrom, Inc. (NYSE:JWN), Michael Kors Holdings Ltd (NYSE:KORS), Limited Brands, Inc. (NYSE:LTD), and Ross Stores, Inc. (NASDAQ:ROST). This group of stocks are in the apparel stores industry and their market caps match GPS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Urban Outfitters, Inc. (NASDAQ:URBN)||25||0||5|
|Nordstrom, Inc. (NYSE:JWN)||26||0||6|
|Michael Kors Holdings Ltd (NYSE:KORS)||39||0||0|
|Limited Brands, Inc. (NYSE:LTD)||19||0||0|
|Ross Stores, Inc. (NASDAQ:ROST)||30||0||6|
With the results exhibited by Insider Monkey’s research, everyday investors should always monitor hedge fund and insider trading sentiment, and The Gap Inc. (NYSE:GPS) shareholders fit into this picture quite nicely.
See the 7 most bullish money managers: