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Here is What Hedge Funds Think About Safeway Inc. (NYSE:SWY)

Is Safeway Inc. (NYSE:SWY) going to take off soon? Investors who are in the know are selling. The number of bullish hedge fund positions decreased by 9 recently.

In today’s marketplace, there are many metrics shareholders can use to analyze their holdings. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the broader indices by a superb margin (see just how much).

Safeway Inc. (NYSE:SWY)Equally as key, bullish insider trading activity is another way to break down the world of equities. Just as you’d expect, there are plenty of reasons for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

Consequently, it’s important to take a gander at the key action encompassing Safeway Inc. (NYSE:SWY).

How have hedgies been trading Safeway Inc. (NYSE:SWY)?

At the end of the fourth quarter, a total of 19 of the hedge funds we track were long in this stock, a change of -32% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Safeway Inc. (NYSE:SWY). Citadel Investment Group has a $35 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Ron Gutfleish of Elm Ridge Capital, with a $29 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Ray Dalio’s Bridgewater Associates and Scott Scher & Michael Prober’s Clovis Capital Management.

Due to the fact that Safeway Inc. (NYSE:SWY) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of funds that elected to cut their full holdings at the end of the year. It’s worth mentioning that Peter J. Eichler Jr.’s Aletheia Research and Management dropped the largest stake of the “upper crust” of funds we monitor, worth an estimated $32 million in stock., and Daniel Bubis of Tetrem Capital Management was right behind this move, as the fund said goodbye to about $19 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 9 funds at the end of the year.

How are insiders trading Safeway Inc. (NYSE:SWY)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Safeway Inc. (NYSE:SWY) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Safeway Inc. (NYSE:SWY) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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