Is The Pep Boys - Manny, Moe & Jack (NYSE:PBY) a healthy stock for your portfolio? Money managers are getting less bullish. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience
In the financial world, there are dozens of methods market participants can use to track their holdings. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a very impressive margin (see just how much).
Equally as integral, positive insider trading sentiment is a second way to break down the world of equities. Obviously, there are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).
Consequently, we're going to take a gander at the latest action surrounding The Pep Boys - Manny, Moe & Jack (NYSE:PBY).
At the end of the first quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Mario Gabelli's GAMCO Investors had the largest position in The Pep Boys - Manny, Moe & Jack (NYSE:PBY), worth close to $57.2 million, comprising 0.4% of its total 13F portfolio. On GAMCO Investors's heels is Glenhill Advisors, managed by Glenn J. Krevlin, which held a $18.3 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other peers that hold long positions include Andrew Spokes's Farallon Capital, J. Carlo Cannell's Cannell Capital and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Judging by the fact that The Pep Boys - Manny, Moe & Jack (NYSE:PBY) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there exists a select few fund managers who were dropping their positions entirely in Q1. At the top of the heap, D. E. Shaw's D E Shaw dumped the largest position of all the hedgies we key on, valued at an estimated $0.2 million in stock., and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund dumped about $0.1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity, especially when it's bullish, is most useful when the company we're looking at has seen transactions within the past 180 days. Over the latest 180-day time frame, The Pep Boys - Manny, Moe & Jack (NYSE:PBY) has seen zero unique insiders buying, and 2 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 Pep Boys - Manny, Moe & Jack (NYSE:PBY). These stocks are AutoZone, Inc. (NYSE:AZO), O'Reilly Automotive Inc (NASDAQ:ORLY), U.S. Auto Parts Network, Inc. (NASDAQ:PRTS), , and Advance Auto Parts, Inc. (NYSE:AAP). This group of stocks are in the auto parts stores industry and their market caps match PBY's market cap.