CONN’S, Inc. (NASDAQ:CONN) was in 19 hedge funds’ portfolio at the end of March. CONN shareholders have witnessed an increase in hedge fund interest recently. There were 15 hedge funds in our database with CONN holdings at the end of the previous quarter.
According to most stock holders, hedge funds are perceived as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds in operation at present, we choose to focus on the elite of this club, about 450 funds. It is estimated that this group oversees the lion’s share of all hedge funds’ total capital, and by monitoring their best equity investments, we have identified a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as beneficial, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. There are a variety of incentives for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if piggybackers understand where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the recent action surrounding CONN’S, Inc. (NASDAQ:CONN).
What does the smart money think about CONN’S, Inc. (NASDAQ:CONN)?
At the end of the first quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of 27% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Alydar Capital, managed by John Murphy, holds the largest position in CONN’S, Inc. (NASDAQ:CONN). Alydar Capital has a $29.2 million position in the stock, comprising 1.9% of its 13F portfolio. On Alydar Capital’s heels is Mark Broach of Manatuck Hill Partners, with a $24.1 million position; 3% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, James Dondero’s Highland Capital Management and Richard Driehaus’s Driehaus Capital.
Now, key hedge funds have been driving this bullishness. Highland Capital Management, managed by James Dondero, established the largest position in CONN’S, Inc. (NASDAQ:CONN). Highland Capital Management had 12 million invested in the company at the end of the quarter. SAC Subsidiary’s CR Intrinsic Investors also initiated a $7.4 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How are insiders trading CONN’S, Inc. (NASDAQ:CONN)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, CONN’S, Inc. (NASDAQ:CONN) has experienced 1 unique insiders buying, and 13 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to CONN’S, Inc. (NASDAQ:CONN). These stocks are Best Buy Co., Inc. (NYSE:BBY), RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), , and GameStop Corp. (NYSE:GME). This group of stocks are in the electronics stores industry and their market caps resemble CONN’s market cap.