Is Aeropostale, Inc. (NYSE:ARO) a healthy stock for your portfolio? Prominent investors are in a bearish mood. The number of bullish hedge fund positions retreated by 9 recently.
In today’s marketplace, there are dozens of methods market participants can use to analyze stocks. A duo of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a very impressive amount (see just how much).
Just as integral, positive insider trading activity is a second way to break down the stock market universe. There are a variety of motivations for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this method if investors understand where to look (learn more here).
Now, let’s take a look at the recent action encompassing Aeropostale, Inc. (NYSE:ARO).
What does the smart money think about Aeropostale, Inc. (NYSE:ARO)?
In preparation for this quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of -31% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Patrick McCormack’s Tiger Consumer Management had the most valuable position in Aeropostale, Inc. (NYSE:ARO), worth close to $51.7 million, accounting for 2.1% of its total 13F portfolio. On Tiger Consumer Management’s heels is Matt Sirovich and Jeremy Mindich of Scopia Capital, with a $45.1 million position; 1.6% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Richard S. Pzena’s Pzena Investment Management, Jim Simons’s Renaissance Technologies and Craig C. Albert’s Sheffield Asset Management.
Seeing as Aeropostale, Inc. (NYSE:ARO) has experienced falling interest from hedge fund managers, logic holds that there were a few fund managers who were dropping their full holdings in Q1. It’s worth mentioning that Anthony Bozza’s Lakewood Capital Management cut the biggest investment of the “upper crust” of funds we monitor, comprising an estimated $5.2 million in stock.. John Murphy’s fund, Alydar Capital, also dropped its stock, about $3.9 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 9 funds in Q1.
Insider trading activity in Aeropostale, Inc. (NYSE:ARO)
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Aeropostale, Inc. (NYSE:ARO) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Aeropostale, Inc. (NYSE:ARO). These stocks are Stage Stores Inc (NYSE:SSI), Ann Inc (NYSE:ANN), Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), The Jones Group Inc. (NYSE:JNY), and Children’s Place Retail Stores, Inc. (NASDAQ:PLCE). This group of stocks are in the apparel stores industry and their market caps resemble ARO’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Stage Stores Inc (NYSE:SSI)||18||0||6|
|Ann Inc (NYSE:ANN)||19||0||2|
|Jos. A. Bank Clothiers Inc (NASDAQ:JOSB)||13||0||2|
|The Jones Group Inc. (NYSE:JNY)||12||0||3|
|Children’s Place Retail Stores, Inc. (NASDAQ:PLCE)||19||0||5|
With the results demonstrated by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading activity, and Aeropostale, Inc. (NYSE:ARO) is an important part of this process.