Is Blyth, Inc. (NYSE:BTH) a first-rate investment right now? Prominent investors are taking a bearish view. The number of bullish hedge fund positions were trimmed by 4 lately.
In the eyes of most investors, hedge funds are assumed to be unimportant, old financial tools of years past. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the upper echelon of this club, close to 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total capital, and by keeping an eye on their highest performing stock picks, we have figured out a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as integral, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are many stimuli for an executive to cut shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
With all of this in mind, we’re going to take a gander at the latest action surrounding Blyth, Inc. (NYSE:BTH).
What have hedge funds been doing with Blyth, Inc. (NYSE:BTH)?
Heading into 2013, a total of 14 of the hedge funds we track were bullish in this stock, a change of -22% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the largest position in Blyth, Inc. (NYSE:BTH). Nantahala Capital Management has a $9 million position in the stock, comprising 1.3% of its 13F portfolio. On Nantahala Capital Management’s heels is Michael Blitzer of Kingstown Capital Management, with a $8 million position; 0.4% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Philip Hempleman’s Ardsley Partners, Glenn J. Krevlin’s Glenhill Advisors and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management.
Due to the fact that Blyth, Inc. (NYSE:BTH) has witnessed falling interest from hedge fund managers, it’s safe to say that there was a specific group of hedge funds who were dropping their entire stakes at the end of the year. Interestingly, Israel Englander’s Millennium Management cut the largest investment of the 450+ funds we monitor, worth an estimated $5 million in stock., and Barry Rosenstein of JANA Partners was right behind this move, as the fund sold off about $4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds at the end of the year.
How are insiders trading Blyth, Inc. (NYSE:BTH)?
Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Blyth, Inc. (NYSE:BTH) has experienced 2 unique insiders buying, and zero 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 Blyth, Inc. (NYSE:BTH). These stocks are The Female Health Company (NASDAQ:FHCO), Nutraceutical Int’l Corp. (NASDAQ:NUTR), Inter Parfums, Inc. (NASDAQ:IPAR), United-Guardian, Inc. (NASDAQ:UG), and Elizabeth Arden, Inc. (NASDAQ:RDEN). This group of stocks are in the personal products industry and their market caps match BTH’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|The Female Health Company (NASDAQ:FHCO)||6||1||4|
|Nutraceutical Int’l Corp. (NASDAQ:NUTR)||2||0||2|
|Inter Parfums, Inc. (NASDAQ:IPAR)||4||0||7|
|United-Guardian, Inc. (NASDAQ:UG)||2||0||0|
|Elizabeth Arden, Inc. (NASDAQ:RDEN)||11||0||4|
With the results demonstrated by our strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Blyth, Inc. (NYSE:BTH) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.