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The Pantry, Inc. (PTRY): Hedge Funds and Insiders Are Bearish, What Should You Do? – Ingles Markets, Incorporated (IMKTA), Arden Group, Inc. (ARDNA)

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Is The Pantry, Inc. (NASDAQ:PTRY) a buy, sell, or hold? Money managers are selling. The number of bullish hedge fund positions dropped by 4 lately.

The Pantry, Inc. (NASDAQ:PTRY)

To most stock holders, hedge funds are perceived as unimportant, outdated financial vehicles of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey look at the top tier of this group, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their best investments, we have spotted a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced 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 24 percentage points in 7 months (see all of our picks from August).

Just as beneficial, positive insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are plenty of incentives for an executive to cut shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).

With all of this in mind, it’s important to take a peek at the key action surrounding The Pantry, Inc. (NASDAQ:PTRY).

How have hedgies been trading The Pantry, Inc. (NASDAQ:PTRY)?

In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in The Pantry, Inc. (NASDAQ:PTRY), worth close to $5 million, comprising 0% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $3 million position; the fund has 0% of its 13F portfolio invested in the stock. Other peers that are bullish include Andy Redleaf’s Whitebox Advisors, Joel Greenblatt’s Gotham Asset Management and Ken Griffin’s Citadel Investment Group.

Judging by the fact that The Pantry, Inc. (NASDAQ:PTRY) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few funds that slashed their positions entirely at the end of the year. It’s worth mentioning that Malcolm Fairbairn’s Ascend Capital said goodbye to the largest investment of the 450+ funds we track, totaling close to $20 million in stock.. Daniel S. Och’s fund, OZ Management, also cut its call options., about $9 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 4 funds at the end of the year.

How have insiders been trading The Pantry, Inc. (NASDAQ:PTRY)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, The Pantry, Inc. (NASDAQ:PTRY) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to The Pantry, Inc. (NASDAQ:PTRY). These stocks are Core-Mark Holding Company, Inc. (NASDAQ:CORE), Ingles Markets, Incorporated (NASDAQ:IMKTA), Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC), Arden Group, Inc. (NASDAQ:ARDNA), and Roundy’s Inc (NYSE:RNDY). All of these stocks are in the grocery stores industry and their market caps are similar to PTRY’s market cap.

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