Restoration Hardware Holdings Inc (RH): Are Hedge Funds Right About This Stock?

In the 21st century investor’s toolkit, there are tons of gauges investors can use to analyze Mr. Market. A pair of the most innovative 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 hedge fund managers can trounce the broader indices by a significant margin (see just how much).

Equally as crucial, positive insider trading activity is a second way to analyze the marketplace. Obviously, there are many stimuli for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Now that that’s out of the way, we’re going to study the newest info surrounding Restoration Hardware Holdings Inc (NYSE:RH).

Hedge fund activity in Restoration Hardware Holdings Inc (NYSE:RH)

Heading into Q3, a total of 15 of the hedge funds we track were bullish in this stock, a change of 114% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.

Restoration Hardware Holdings Inc (NYSE:RH)According to our 13F database, Pasco Alfaro / Richard Tumure’s Miura Global Management had the most valuable position in Restoration Hardware Holdings Inc (NYSE:RH), worth close to $67.2 million, comprising 8.7% of its total 13F portfolio. Coming in second is Alexander Mitchell of Scopus Asset Management, with a $64.1 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Donald Chiboucis’s Columbus Circle Investors, Drew Cupps’s Cupps Capital Management and Patrick McCormack’s Tiger Consumer Management.

As aggregate interest spiked, certain money managers have been driving this bullishness. Miura Global Management, managed by Pasco Alfaro / Richard Tumure, initiated the biggest position in Restoration Hardware Holdings Inc (NYSE:RH). Miura Global Management had 67.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $64.1 million investment in the stock during the quarter. The following funds were also among the new RH investors: Donald Chiboucis’s Columbus Circle Investors, Drew Cupps’s Cupps Capital Management, and Patrick McCormack’s Tiger Consumer Management.

What do corporate executives and insiders think about Restoration Hardware Holdings Inc (NYSE:RH)?

Insider buying is best served when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, Restoration Hardware Holdings Inc (NYSE:RH) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Restoration Hardware Holdings Inc (NYSE:RH). These stocks are Kirkland’s, Inc. (NASDAQ:KIRK), Gordmans Stores, Inc. (NASDAQ:GMAN), Williams-Sonoma, Inc. (NYSE:WSM), Haverty Furniture Companies, Inc. (NYSE:HVT), and Pier 1 Imports, Inc. (NYSE:PIR). This group of stocks are the members of the home furnishing stores industry and their market caps resemble RH’s market cap.