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UniFirst Corp (UNF): Insiders Are Dumping, Should You?: Oxford Industries, Inc. (OXM), Carter’s, Inc. (CRI)

UniFirst Corp (NYSE:UNF) was in 9 hedge funds’ portfolio at the end of December. UNF has experienced an increase in activity from the world’s largest hedge funds in recent months. There were 8 hedge funds in our database with UNF positions at the end of the previous quarter.

To the average investor, there are many metrics investors can use to analyze Mr. Market. Two of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the broader indices by a healthy margin (see just how much).

Just as key, bullish insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are a variety of reasons for an executive to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).

Keeping this in mind, we’re going to take a peek at the latest action regarding UniFirst Corp (NYSE:UNF).

Hedge fund activity in UniFirst Corp (NYSE:UNF)

Heading into 2013, a total of 9 of the hedge funds we track held long positions in this stock, a change of 13% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in UniFirst Corp (NYSE:UNF). Royce & Associates has a $143 million position in the stock, comprising 0.5% of its 13F portfolio. On Royce & Associates’s heels is Jean-Marie Eveillard of First Eagle Investment Management, with a $73 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Martin Whitman’s Third Avenue Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, some big names were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, established the most valuable position in UniFirst Corp (NYSE:UNF). Gotham Asset Management had 1 million invested in the company at the end of the quarter. Andy Redleaf’s Whitebox Advisors also made a $1 million investment in the stock during the quarter.

How have insiders been trading UniFirst Corp (NYSE:UNF)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, UniFirst Corp (NYSE:UNF) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to UniFirst Corp (NYSE:UNF). These stocks are Oxford Industries, Inc. (NYSE:OXM), Carter’s, Inc. (NYSE:CRI), Quiksilver, Inc. (NYSE:ZQK), Fifth & Pacific Companies Inc (NYSE:FNP), and Columbia Sportswear Company (NASDAQ:COLM). This group of stocks are the members of the textile – apparel clothing industry and their market caps are closest to UNF’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Oxford Industries, Inc. (NYSE:OXM) 5 2 3
Carter’s, Inc. (NYSE:CRI) 30 0 1
Quiksilver, Inc. (NYSE:ZQK) 8 0 2
Fifth & Pacific Companies Inc (NYSE:FNP) 20 0 0
Columbia Sportswear Company (NASDAQ:COLM) 8 0 5

With the results shown by the aforementioned tactics, retail investors should always monitor hedge fund and insider trading sentiment, and UniFirst Corp (NYSE:UNF) is no exception.

Click here to learn why you should track hedge funds

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