Nash-Finch Company (NAFC): Hedge Funds and Insiders Are Bearish, What Should You Do?

Is Nash-Finch Company (NASDAQ:NAFC) a healthy stock for your portfolio? The best stock pickers are becoming less hopeful. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience

To most shareholders, hedge funds are assumed to be worthless, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey look at the top tier of this group, about 450 funds. Most estimates calculate that this group controls most of the smart money’s total capital, and by tracking their top picks, we have unsheathed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Nash-Finch Company (NASDAQ:NAFC)

Just as important, optimistic insider trading sentiment is a second way to break down the stock market universe. As the old adage goes: there are a number of stimuli for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

Keeping this in mind, let’s take a glance at the recent action surrounding Nash-Finch Company (NASDAQ:NAFC).

What have hedge funds been doing with Nash-Finch Company (NASDAQ:NAFC)?

In preparation for this year, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially.

Of the funds we track, AQR Capital Management, managed by Cliff Asness, holds the largest position in Nash-Finch Company (NASDAQ:NAFC). AQR Capital Management has a $4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $1.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Paul Tudor Jones’s Tudor Investment Corp, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Due to the fact that Nash-Finch Company (NASDAQ:NAFC) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers that decided to sell off their positions entirely in Q4. It’s worth mentioning that D. E. Shaw’s D E Shaw dumped the largest stake of all the hedgies we watch, totaling an estimated $0.3 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $0.2 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Nash-Finch Company (NASDAQ:NAFC)?

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time frame, Nash-Finch Company (NASDAQ:NAFC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Nash-Finch Company (NASDAQ:NAFC). These stocks are Crystal Rock Holdings Inc (NYSEAMEX:CRVP), United Natural Foods, Inc. (NASDAQ:UNFI), AMCON Distributing Co. (NYSEAMEX:DIT), The Chefs Warehouse, Inc (NASDAQ:CHEF), and Spartan Stores, Inc. (NASDAQ:SPTN). This group of stocks are in the food wholesale industry and their market caps are closest to NAFC’s market cap.