Hedge Funds Aren’t Crazy About Williams-Sonoma, Inc. (WSM) Anymore

To the average investor, there are a multitude of indicators investors can use to monitor their holdings. A duo of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outclass the market by a very impressive amount (see just how much).

Just as necessary, bullish insider trading sentiment is a second way to look at the world of equities. Obviously, there are a variety of stimuli for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).

Thus, it’s important to study the recent info for Williams-Sonoma, Inc. (NYSE:WSM).

Williams-Sonoma, Inc. (NYSE:WSM)

What does the smart money think about Williams-Sonoma, Inc. (NYSE:WSM)?

In preparation for the third quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -19% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.

When using filings from the hedgies we track, Robert Joseph Caruso’s Select Equity Group had the most valuable position in Williams-Sonoma, Inc. (NYSE:WSM), worth close to $239.2 million, accounting for 3.4% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $44.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Thomas Lenox Kempner’s Davidson Kempner and Matthew Hulsizer’s PEAK6 Capital Management.

Because Williams-Sonoma, Inc. (NYSE:WSM) has experienced a fall in interest from the smart money’s best and brightest, it’s safe to say that there was a specific group of hedgies that slashed their positions entirely last quarter. It’s worth mentioning that John Armitage’s Egerton Capital Limited sold off the largest investment of the 450+ funds we watch, valued at about $115.7 million in stock. Ricky Sandler’s fund, Eminence Capital, also said goodbye to its stock, about $59.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.

What have insiders been doing with Williams-Sonoma, Inc. (NYSE:WSM)?

Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Williams-Sonoma, Inc. (NYSE:WSM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Williams-Sonoma, Inc. (NYSE:WSM). These stocks are Gordmans Stores, Inc. (NASDAQ:GMAN), Haverty Furniture Companies, Inc. (NYSE:HVT), Restoration Hardware Holdings Inc (NYSE:RH), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and Pier 1 Imports, Inc. (NYSE:PIR). All of these stocks are in the home furnishing stores industry and their market caps are closest to WSM’s market cap.