Ascena Retail Group Inc (ASNA): Are Hedge Funds Right About This Stock?

As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Ascena Retail Group Inc (NASDAQ:ASNA) in this article.

Ascena Retail Group Inc was in 23 hedge funds’ portfolios at the end of September. ASNA investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. There were 25 hedge funds in our database with ASNA positions at the end of the previous quarter. At the end of this article we will also compare ASNA to other stocks including Crane Co. (NYSE:CR), Thor Industries, Inc. (NYSE:THO), and First Citizens BancShares Inc. (NASDAQ:FCNCA) to get a better sense of its popularity.

Follow Ascena Retail Group Inc. (NASDAQ:ASNAQ)

To most stock holders, hedge funds are perceived as underperforming, old investment tools of years past. While there are greater than 8000 funds with their doors open today, Our experts look at the crème de la crème of this group, around 700 funds. These hedge fund managers administer bulk of the smart money’s total asset base, and by following their first-class equity investments, Insider Monkey has come up with a number of investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, let’s go over the fresh action encompassing Ascena Retail Group Inc (NASDAQ:ASNA).

What have hedge funds been doing with Ascena Retail Group Inc (NASDAQ:ASNA)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Alexander Medina Seaver’s Stadium Capital Management has the biggest position in Ascena Retail Group Inc (NASDAQ:ASNA), worth close to $109.9 million, corresponding to 40.3% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding a $52.9 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism include Daniel S. Och’s OZ Management, Joel Greenblatt’s Gotham Asset Management and Christopher Shackelton and Adam Gray’s Coliseum Capital.

Since Ascena Retail Group Inc (NASDAQ:ASNA) has experienced declining sentiment from hedge fund managers, it’s safe to say that there were a few money managers who were dropping their entire stakes last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $47.5 million in stock, and Columbus Circle Investors was right behind this move, as the fund dumped about $13.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Ascena Retail Group Inc (NASDAQ:ASNA). These stocks are Crane Co. (NYSE:CR), Thor Industries, Inc. (NYSE:THO), First Citizens BancShares Inc. (NASDAQ:FCNCA), and Piedmont Office Realty Trust, Inc. (NYSE:PDM). This group of stocks’ market valuations match ASNA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CR 21 267772 -2
THO 21 232892 3
FCNCA 9 125208 -1
PDM 7 141889 -4

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $473 million in ASNA’s case. Crane Co. (NYSE:CR) is the most popular stock in this table. On the other hand Piedmont Office Realty Trust, Inc. (NYSE:PDM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Ascena Retail Group Inc (NASDAQ:ASNA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.