Zale Corporation (NYSE:ZLC) was in 9 hedge funds' portfolio at the end of December. ZLC has seen a decrease in activity from the world's largest hedge funds of late. There were 10 hedge funds in our database with ZLC holdings at the end of the previous quarter.
In the financial world, there are plenty of indicators shareholders can use to monitor stocks. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the market by a healthy margin (see just how much).
Just as integral, bullish insider trading sentiment is another way to parse down the financial markets. Obviously, there are a variety of motivations for an executive to cut shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this method if you know what to do (learn more here).
With all of this in mind, let's take a glance at the recent action surrounding Zale Corporation (NYSE:ZLC).
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of -10% from the third quarter. With the smart money's sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes considerably.
Of the funds we track, Richard Breeden's Breeden Capital Management had the most valuable position in Zale Corporation (NYSE:ZLC), worth close to $20.4 million, accounting for 11.7% of its total 13F portfolio. Sitting at the No. 2 spot is Scopus Asset Management, managed by Alexander Mitchell, which held a $4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Ken Griffin's Citadel Investment Group, D. E. Shaw's D E Shaw and Jim Simons's Renaissance Technologies.
Due to the fact that Zale Corporation (NYSE:ZLC) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of hedgies that decided to sell off their full holdings in Q4. It's worth mentioning that Steven Cohen's SAC Capital Advisors dropped the largest investment of the "upper crust" of funds we key on, valued at an estimated $0.6 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold's fund, LMR Partners, also cut its stock, about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds in Q4.
Bullish insider trading is particularly usable when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Zale Corporation (NYSE:ZLC) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Zale Corporation (NYSE:ZLC). These stocks are Signet Jewelers Ltd. (NYSE:SIG), Blue Nile Inc (NASDAQ:NILE), and Charles & Colvard, Ltd. (NASDAQ:CTHR). This group of stocks are the members of the jewelry stores industry and their market caps are similar to ZLC's market cap.