Editor’s Note: FLWS management reached out to us, helpfully pointing out that the “largest “hedge fund” holders — McClain, Moab, Royce, GAMCO (Gabelli), Bridgeway — have increased or remained stable since early this year. In addition, since the start of the year, we have seen Acadian and Citadel build positions. So, net “hedge fund” positions should actually be up from start of the year. Renaissance (black box- quantitative trader) continues to trade position, currently at >500k shares.”
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. There were 8 hedge funds in our database with FLWS holdings at the end of the previous quarter.
In the eyes of most investors, hedge funds are perceived as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, close to 450 funds. It is estimated that this group oversees the majority of all hedge funds’ total asset base, and by tracking their highest performing investments, we have found a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 24 percentage points in 7 months (see the details here).
Equally as integral, optimistic insider trading activity is a second way to break down the marketplace. There are many incentives for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if you understand where to look (learn more here).
Consequently, we’re going to take a look at the recent action encompassing 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS).
What does the smart money think about 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)?
In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS). Royce & Associates has a $3.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $3.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Mario Gabelli’s GAMCO Investors, D. E. Shaw’s D E Shaw and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
At the top of the heap deciding to trim their stakes of , John Burbank’s Passport Capital dropped the largest stake of all the hedgies we watch, valued at an estimated $0.1 million in stock., and Israel Englander of Millennium Management was right behind this move. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past six months. Over the last six-month time period, 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS). These stocks are West Marine, Inc. (NASDAQ:WMAR), TravelCenters of America LLC (NYSEAMEX:TA), Winmark Corporation (NASDAQ:WINA), Medifast, Inc. (NYSE:MED), and MarineMax, Inc. (NYSE:HZO). This group of stocks belong to the specialty retail, other industry and their market caps resemble FLWS’s market cap.
