Is Rite Aid Corporation (NYSE:RAD) a good investment?
To the average investor, there are many methods market participants can use to watch their holdings. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outpace the S&P 500 by a superb amount (see just how much).
Equally as useful, bullish insider trading activity is another way to analyze the financial markets. Obviously, there are a number of reasons for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).
Furthermore, let’s examine the latest info surrounding Rite Aid Corporation (NYSE:RAD).
What does the smart money think about Rite Aid Corporation (NYSE:RAD)?
Heading into Q3, a total of 31 of the hedge funds we track held long positions in this stock, a change of 35% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.
When using filings from the hedgies we track, Mark McGoldrick and Jason Maynard’s Mouth Kellett Capital Management had the most valuable position in Rite Aid Corporation (NYSE:RAD), worth close to $99 million, comprising 11.9% of its total 13F portfolio. Coming in second is David Einhorn of Greenlight Capital, with a $57.8 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Kenneth Mario Garschina’s Mason Capital Management, Don Morgan’s Brigade Capital and D. E. Shaw’s D E Shaw.
As aggregate interest spiked, certain bigger names were leading the bulls’ herd. Mouth Kellett Capital Management, managed by Mark McGoldrick and Jason Maynard, assembled the biggest position in Rite Aid Corporation (NYSE:RAD). Mouth Kellett Capital Management had 99 million invested in the company at the end of the quarter. David Einhorn’s Greenlight Capital also made a $57.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Kenneth Mario Garschina’s Mason Capital Management, Don Morgan’s Brigade Capital, and D. E. Shaw’s D E Shaw.
How are insiders trading Rite Aid Corporation (NYSE:RAD)?
Bullish insider trading is best served when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, Rite Aid Corporation (NYSE:RAD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Rite Aid Corporation (NYSE:RAD). These stocks are Walgreen Company (NYSE:WAG), China Nepstar Chain Drugstore Ltd.(ADR) (NYSE:NPD), PharMerica Corporation (NYSE:PMC), BioScrip Inc. (NASDAQ:BIOS), and GNC Holdings Inc (NYSE:GNC). This group of stocks are in the drug stores industry and their market caps resemble RAD’s market cap.