Is Limited Brands, Inc. (NYSE:LTD) a buy right now? Investors who are in the know are getting less bullish. The number of long hedge fund positions went down by 1 in recent months.
To the average investor, there are many metrics market participants can use to watch Mr. Market. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can beat the S&P 500 by a healthy margin (see just how much).
Just as integral, positive insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are a variety of motivations for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).
Now, it’s important to take a look at the latest action encompassing Limited Brands, Inc. (NYSE:LTD).
How are hedge funds trading Limited Brands, Inc. (NYSE:LTD)?
Heading into 2013, a total of 19 of the hedge funds we track were long in this stock, a change of -5% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Columbus Circle Investors, managed by Donald Chiboucis, holds the biggest position in Limited Brands, Inc. (NYSE:LTD). Columbus Circle Investors has a $76 million position in the stock, comprising 0.6% of its 13F portfolio. On Columbus Circle Investors’s heels is Murray Stahl of Horizon Asset Management, with a $66 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Paul Ruddockáand Steve Heinz’s Lansdowne Partners and Andrew Sandler’s Sandler Capital Management.
Since Limited Brands, Inc. (NYSE:LTD) has faced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers that decided to sell off their full holdings in Q4. Interestingly, John Brennan’s Sirios Capital Management dumped the biggest investment of the “upper crust” of funds we watch, valued at an estimated $20 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in Q4.
How have insiders been trading Limited Brands, Inc. (NYSE:LTD)?
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 half-year time period, Limited Brands, Inc. (NYSE:LTD) has experienced 1 unique insiders purchasing, 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 Limited Brands, Inc. (NYSE:LTD). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Nordstrom, Inc. (NYSE:JWN), Michael Kors Holdings Ltd (NYSE:KORS), and Ross Stores, Inc. (NASDAQ:ROST). This group of stocks belong to the apparel stores industry and their market caps match LTD’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Urban Outfitters, Inc. (NASDAQ:URBN)||25||0||4|
|The Gap Inc. (NYSE:GPS)||29||0||7|
|Nordstrom, Inc. (NYSE:JWN)||26||0||6|
|Michael Kors Holdings Ltd (NYSE:KORS)||39||0||0|
|Ross Stores, Inc. (NASDAQ:ROST)||30||0||5|
With the results exhibited by the aforementioned tactics, retail investors should always monitor hedge fund and insider trading activity, and Limited Brands, Inc. (NYSE:LTD) is an important part of this process.