Hedge Funds Are Dumping Citi Trends, Inc. (CTRN)

We, at Insider Monkey, have gone over 700 13F filings that hedge funds and prominent investors are required to file with the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Citi Trends, Inc. (NASDAQ:CTRN) based on that data.

Citi Trends, Inc. (NASDAQ:CTRN) was in 17 hedge funds’ portfolios at the end of September. Citi Trends, Inc. (NASDAQ:CTRN) shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 19 hedge funds in our database with Citi Trends, Inc. (NASDAQ:CTRN) positions at the end of the previous quarter. At the end of this article, we will also compare Citi Trends, Inc. (NASDAQ:CTRN) to other stocks, including Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), First Foundation Inc (NASDAQ:FFWM), and Bazaarvoice Inc (NASDAQ:BV) to get a better sense of its popularity.

In today’s marketplace there are a multitude of signals stock market investors have at their disposal to assess stocks. Two of the less known signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite fund managers can beat the broader indices by a healthy margin (see the details here).

With all of this in mind, we’re going to view the latest action surrounding Citi Trends, Inc. (NASDAQ:CTRN).

Hedge fund activity in Citi Trends, Inc. (NASDAQ:CTRN)

At the end of September, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 11% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the most valuable position in Citi Trends, Inc. (NASDAQ:CTRN). Nantahala Capital Management has a $10.3 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $9.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Israel Englander’s Millennium Management, Peter Schliemann’s Rutabaga Capital Management and Daniel Lascano’s Lomas Capital Management.

Seeing as Citi Trends, Inc. (NASDAQ:CTRN) has faced a declining sentiment from hedge fund managers, we can see that there was a specific group of money managers that slashed their full holdings last quarter. It’s worth mentioning that Neil Chriss’ Hutchin Hill Capital dumped the biggest stake of the 700 funds tracked by Insider Monkey, comprising an estimated $0.5 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also dumped its stock, about $0.5 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Citi Trends, Inc. (NASDAQ:CTRN) but similarly valued. We will take a look at Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), First Foundation Inc (NASDAQ:FFWM), Bazaarvoice Inc (NASDAQ:BV), and Chase Corporation (NYSEMKT:CCF). This group of stocks’ market caps is closest to Citi Trends, Inc. (NASDAQ:CTRN)’s market cap.

As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $61 million in Citi Trends, Inc. (NASDAQ:CTRN)’s case. Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is the most popular stock in this table. On the other hand, Chase Corporation (NYSEMKT:CCF) is the least popular one with only six bullish hedge fund positions. Citi Trends, Inc. (NASDAQ:CTRN) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SCHN might be a better candidate to consider for a long position.