Should You Go Shopping for Shares of Ascena Retail Group Inc (ASNA)?

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Ascena Retail Group Inc (NASDAQ:ASNA).

Ascena Retail Group Inc (NASDAQ:ASNA) was in 28 hedge funds’ portfolios at the end of September. ASNA shareholders have witnessed an increase in hedge fund sentiment of late. There were 23 hedge funds in our database with ASNA positions at the end of the previous quarter. At the end of this article we will also compare ASNA to other stocks including Forward Air Corporation (NASDAQ:FWRD), Horace Mann Educators Corporation (NYSE:HMN), and Noah Holdings Limited (ADR) (NYSE:NOAH) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Peter Bernik/Shutterstock.com

What does the smart money think about Ascena Retail Group Inc (NASDAQ:ASNA)?

At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 22% jump from one quarter earlier, though ownership remains slightly below where it was two quarters ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alexander Medina Seaver’s Stadium Capital Management has the most valuable position in Ascena Retail Group Inc (NASDAQ:ASNA), worth close to $82.5 million, corresponding to 26.7% of its total 13F portfolio. Coming in second is Coliseum Capital, managed by Christopher Shackelton and Adam Gray, which holds a $31.4 million position; 11% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions encompass Gregg J. Powers’ Private Capital Management, Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates.