Finish Line Inc (FINL): Hedge Funds and Insiders Are Bearish, What Should You Do?

Finish Line Inc (NASDAQ:FINL) was in 13 hedge funds’ portfolio at the end of the first quarter of 2013. FINL investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. There were 18 hedge funds in our database with FINL positions at the end of the previous quarter.

In today’s marketplace, there are a multitude of metrics shareholders can use to watch Mr. Market. Some of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the broader indices by a healthy margin (see just how much).

Finish Line Inc (NASDAQ:FINL)

Equally as beneficial, bullish insider trading sentiment is another way to break down the financial markets. There are many incentives for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

Consequently, let’s take a glance at the latest action surrounding Finish Line Inc (NASDAQ:FINL).

How have hedgies been trading Finish Line Inc (NASDAQ:FINL)?

Heading into Q2, a total of 13 of the hedge funds we track held long positions in this stock, a change of -28% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Finish Line Inc (NASDAQ:FINL), worth close to $111.6 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Hawkeye Capital, managed by Richard Rubin, which held a $40.8 million position; 15.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Ken Griffin’s Citadel Investment Group, David Keidan’s Buckingham Capital Management and Craig C. Albert’s Sheffield Asset Management.

Since Finish Line Inc (NASDAQ:FINL) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers who were dropping their full holdings heading into Q2. Interestingly, Howard Guberman’s Gruss Asset Management cut the largest stake of the 450+ funds we track, totaling close to $6.2 million in stock.. James Dondero’s fund, Highland Capital Management, also said goodbye to its stock, about $4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 5 funds heading into Q2.

How are insiders trading Finish Line Inc (NASDAQ:FINL)?

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last six-month time period, Finish Line Inc (NASDAQ:FINL) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Finish Line Inc (NASDAQ:FINL). These stocks are Francesca’s Holdings Corp (NASDAQ:FRAN), EZCORP Inc (NASDAQ:EZPW), Office Depot Inc (NYSE:ODP), OfficeMax Inc (NYSE:OMX), and Barnes & Noble, Inc. (NYSE:BKS). All of these stocks are in the specialty retail, other industry and their market caps resemble FINL’s market cap.