Is Coldwater Creek Inc. (NASDAQ:CWTR) worth your attention right now? Investors who are in the know are selling. The number of long hedge fund positions fell by 4 in recent months.
In the eyes of most stock holders, hedge funds are viewed as slow, old financial vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the masters of this club, about 450 funds. It is widely believed that this group oversees most of the smart money’s total asset base, and by tracking their top stock picks, we have unsheathed a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading activity is a second way to parse down the marketplace. There are many 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. Plenty of empirical studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
Now, we’re going to take a peek at the latest action encompassing Coldwater Creek Inc. (NASDAQ:CWTR).
What does the smart money think about Coldwater Creek Inc. (NASDAQ:CWTR)?
At the end of the first quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of -44% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Coldwater Creek Inc. (NASDAQ:CWTR). Royce & Associates has a $3.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Thomas E. Lynch’s Mill Road Capital Management, Mario Gabelli’s GAMCO Investors and Israel Englander’s Millennium Management.
Because Coldwater Creek Inc. (NASDAQ:CWTR) has faced bearish sentiment from the smart money, it’s easy to see that there was a specific group of hedge funds that decided to sell off their positions entirely heading into Q2. Interestingly, Charles Davidson’s Wexford Capital sold off the largest investment of the 450+ funds we watch, totaling close to $3.8 million in stock.. Mark Broach’s fund, Manatuck Hill Partners, also dumped its stock, about $1.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q2.
Insider trading activity in Coldwater Creek Inc. (NASDAQ:CWTR)
Insider buying is best served when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Coldwater Creek Inc. (NASDAQ:CWTR) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Coldwater Creek Inc. (NASDAQ:CWTR). These stocks are Exceed Co Ltd (NASDAQ:EDS), K Swiss Inc (NASDAQ:KSWS), R.G. Barry Corp. (NASDAQ:DFZ), Tandy Leather Factory, Inc. (NASDAQ:TLF), and Rocky Brands, Inc. (NASDAQ:RCKY). This group of stocks belong to the textile – apparel footwear & accessories industry and their market caps are similar to CWTR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Exceed Co Ltd (NASDAQ:EDS)||1||0||0|
|K Swiss Inc (NASDAQ:KSWS)||7||0||0|
|R.G. Barry Corp. (NASDAQ:DFZ)||5||1||3|
|Tandy Leather Factory, Inc. (NASDAQ:TLF)||4||1||1|
|Rocky Brands, Inc. (NASDAQ:RCKY)||3||1||0|
With the returns demonstrated by our strategies, everyday investors should always watch hedge fund and insider trading activity, and Coldwater Creek Inc. (NASDAQ:CWTR) shareholders fit into this picture quite nicely.