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The Fresh Market Inc (NASDAQ:TFM): Hedge Funds and Insiders Are Bearish, What Should You Do? – Susser Holdings Corporation (NYSE:SUSS), Weis Markets, Inc. (NYSE:WMK)

The Fresh Market Inc (NASDAQ:TFM) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. TFM shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 15 hedge funds in our database with TFM holdings at the end of the previous quarter.

In the eyes of most investors, hedge funds are perceived as unimportant, old investment vehicles of yesteryear. While there are more than 8000 funds trading at the moment, we at Insider Monkey look at the moguls of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total capital, and by watching their highest performing equity investments, we have brought to light a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 25 percentage points in 6.5 month (see the details here).

The Fresh Market Inc (NASDAQ:TFM)

Just as important, optimistic insider trading activity is another way to break down the marketplace. There are many stimuli for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action regarding The Fresh Market Inc (NASDAQ:TFM).

What does the smart money think about The Fresh Market Inc (NASDAQ:TFM)?

At year’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -27% from the third quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Pasco Alfaro / Richard Tumure’s Miura Global Management had the most valuable position in The Fresh Market Inc (NASDAQ:TFM), worth close to $42 million, comprising 5.7% of its total 13F portfolio. The second largest stake is held by Donald Chiboucis of Columbus Circle Investors, with a $35 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Drew Cupps’s Cupps Capital Management and Israel Englander’s Millennium Management.

Since The Fresh Market Inc (NASDAQ:TFM) has faced falling interest from the smart money, logic holds that there exists a select few hedgies who sold off their full holdings heading into 2013. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest investment of the “upper crust” of funds we monitor, worth close to $5 million in stock., and Jeffrey Vinik of Vinik Asset Management was right behind this move, as the fund sold off about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds heading into 2013.

What do corporate executives and insiders think about The Fresh Market Inc (NASDAQ:TFM)?

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, The Fresh Market Inc (NASDAQ:TFM) has experienced zero unique insiders buying, and 3 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 The Fresh Market Inc (NASDAQ:TFM). These stocks are SUPERVALU INC. (NYSE:SVU), Susser Holdings Corporation (NYSE:SUSS), Weis Markets, Inc. (NYSE:WMK), Casey’s General Stores, Inc. (NASDAQ:CASY), and Harris Teeter Supermarkets Inc (NYSE:HTSI). This group of stocks belong to the grocery stores industry and their market caps are similar to TFM’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Susser Holdings Corporation (NYSE:SUSS) 16 1 5
Weis Markets, Inc. (NYSE:WMK) 9 0 0
Casey’s General Stores, Inc. (NASDAQ:CASY) 6 0 4
Harris Teeter Supermarkets Inc (NYSE:HTSI) 5 0 1

With the returns demonstrated by the aforementioned tactics, everyday investors must always monitor hedge fund and insider trading activity, and The Fresh Market Inc (NASDAQ:TFM) applies perfectly to this mantra.

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