J.C. Penney Company, Inc. (NYSE:JCP) was in 27 hedge funds’ portfolio at the end of the fourth quarter of 2012. JCP has experienced an increase in hedge fund sentiment recently. There were 26 hedge funds in our database with JCP holdings at the end of the previous quarter.
Credit: J.C. Penney Company, Inc. (NYSE:JCP)
At the moment, there are tons of methods market participants can use to monitor stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the broader indices by a significant amount (see just how much).
Just as important, positive insider trading sentiment is another way to break down the financial markets. Obviously, there are a variety of stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a look at the recent action surrounding J.C. Penney Company, Inc. (NYSE:JCP).
Hedge fund activity in J.C. Penney Company, Inc. (NYSE:JCP)
Heading into 2013, a total of 27 of the hedge funds we track held long positions in this stock, a change of 4% from the third quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Pershing Square, managed by Bill Ackman, holds the most valuable position in J.C. Penney Company, Inc. (NYSE:JCP). Pershing Square has a $770 million position in the stock, comprising 8.4% of its 13F portfolio. The second largest stake is held by Larry Robbins of Glenview Capital, with a $144 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include William B. Gray’s Orbis Investment Management, and Robert Jaffe’s Force Capital.
As industrywide interest jumped, specific money managers have been driving this bullishness. Pzena Investment Management, managed by Richard S. Pzena, assembled the biggest position in J.C. Penney Company, Inc. (NYSE:JCP). Pzena Investment Management had 19 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $4 million position during the quarter. The other funds with brand new JCP positions are Phill Gross and Robert Atchinson’s Adage Capital Management, Daniel Arbess’s Xerion, and David Costen Haley’s HBK Investments.
How have insiders been trading J.C. Penney Company, Inc. (NYSE:JCP)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, J.C. Penney Company, Inc. (NYSE:JCP) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to J.C. Penney Company, Inc. (NYSE:JCP). These stocks are Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS), Kohl’s Corporation (NYSE:KSS), Saks Inc (NYSE:SKS), Sears Holdings Corporation (NASDAQ:SHLD), and Dillard’s, Inc. (NYSE:DDS). This group of stocks are the members of the department stores industry and their market caps are similar to JCP’s market cap.