Is Interface, Inc. (NASDAQ:TILE) the right pick for your portfolio? The smart money is getting less bullish. The number of long hedge fund bets retreated by 3 lately.
In the financial world, there are many methods market participants can use to track stocks. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outpace their index-focused peers by a very impressive margin (see just how much).
Equally as beneficial, positive insider trading activity is another way to break down the financial markets. There are plenty of stimuli for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).
Now, we’re going to take a peek at the recent action regarding Interface, Inc. (NASDAQ:TILE).
How are hedge funds trading Interface, Inc. (NASDAQ:TILE)?
Heading into 2013, a total of 9 of the hedge funds we track were bullish in this stock, a change of -25% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Ariel Investments, managed by John W. Rogers, holds the largest position in Interface, Inc. (NASDAQ:TILE). Ariel Investments has a $75.2 million position in the stock, comprising 1.6% of its 13F portfolio. The second largest stake is held by Daruma Asset Management, managed by Mariko Gordon, which held a $52.3 million position; 3.1% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Chuck Royce’s Royce & Associates, Steven Cohen’s SAC Capital Advisors and Richard S. Meisenberg’s ACK Asset Management.
Due to the fact that Interface, Inc. (NASDAQ:TILE) has experienced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their positions entirely at the end of the year. Interestingly, Israel Englander’s Catapult Capital Management sold off the biggest stake of the “upper crust” of funds we key on, worth an estimated $0.9 million in stock., and D. E. Shaw of D E Shaw was right behind this move, as the fund cut about $0.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds at the end of the year.
What do corporate executives and insiders think about Interface, Inc. (NASDAQ:TILE)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time period, Interface, Inc. (NASDAQ:TILE) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Interface, Inc. (NASDAQ:TILE). These stocks are Dixie Group Inc (NASDAQ:DXYN), Culp, Inc. (NYSE:CFI), Mohawk Industries, Inc. (NYSE:MHK), Unifi, Inc. (NYSE:UFI), and Albany International Corp. (NYSE:AIN). This group of stocks are the members of the textile industrial industry and their market caps match TILE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Dixie Group Inc (NASDAQ:DXYN) | 1 | 0 | 2 |
| Culp, Inc. (NYSE:CFI) | 4 | 0 | 3 |
| Mohawk Industries, Inc. (NYSE:MHK) | 33 | 0 | 11 |
| Unifi, Inc. (NYSE:UFI) | 5 | 1 | 3 |
| Albany International Corp. (NYSE:AIN) | 8 | 0 | 0 |
With the results shown by the aforementioned strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Interface, Inc. (NASDAQ:TILE) is an important part of this process.
