Is Rite Aid Corporation (NYSE:RAD) a buy right now? The best stock pickers are betting on the stock. The number of long hedge fund bets increased by 2 recently.
In today’s marketplace, there are dozens of methods investors can use to analyze Mr. Market. Two 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 elite money managers can outperform the S&P 500 by a healthy amount (see just how much).
Just as important, positive insider trading sentiment is a second way to break down the stock market universe. Obviously, there are a variety of reasons for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, we’re going to take a glance at the latest action regarding Rite Aid Corporation (NYSE:RAD).
What does the smart money think about Rite Aid Corporation (NYSE:RAD)?
In preparation for this quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 10% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Of the funds we track, Mouth Kellett Capital Management, managed by Mark McGoldrick and Jason Maynard, holds the largest position in Rite Aid Corporation (NYSE:RAD). Mouth Kellett Capital Management has a $65.8 million position in the stock, comprising 8.6% of its 13F portfolio. The second largest stake is held by Marathon Asset Management, managed by Bruce J. Richards and Louis Hanover, which held a $31.8 million position; 2% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Boaz Weinstein’s Saba Capital and Israel Englander’s Millennium Management.
Now, some big names were breaking ground themselves. CR Intrinsic Investors, managed by SAC Subsidiary, established the largest position in Rite Aid Corporation (NYSE:RAD). CR Intrinsic Investors had 11.4 million invested in the company at the end of the quarter. Matthew Knauer and Mina Faltas’s Nokota Management also made a $9 million investment in the stock during the quarter. The other funds with new positions in the stock are Larry Robbins’s Glenview Capital, Daniel Arbess’s Xerion, and Donald Chiboucis’s Columbus Circle Investors.
How have insiders been trading Rite Aid Corporation (NYSE:RAD)?
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Rite Aid Corporation (NYSE:RAD) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Rite Aid Corporation (NYSE:RAD). These stocks are Walgreen Company (NYSE:WAG), PharMerica Corporation (NYSE:PMC), BioScrip Inc. (NASDAQ:BIOS), and GNC Holdings Inc (NYSE:GNC). This group of stocks are the members of the drug stores industry and their market caps match RAD’s market cap.