Is Tractor Supply Company (NASDAQ:TSCO) a sound investment today? Money managers are in a bearish mood. The number of long hedge fund bets were cut by 1 in recent months.
To most shareholders, hedge funds are perceived as underperforming, old investment tools of the past. While there are over 8000 funds with their doors open at the moment, we choose to focus on the leaders of this group, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by keeping an eye on their highest performing investments, we have unearthed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as beneficial, optimistic insider trading activity is another way to parse down the financial markets. As the old adage goes: there are plenty of reasons for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
With all of this in mind, we’re going to take a gander at the latest action regarding Tractor Supply Company (NASDAQ:TSCO).
What does the smart money think about Tractor Supply Company (NASDAQ:TSCO)?
At Q1’s end, a total of 24 of the hedge funds we track were bullish in this stock, a change of -4% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Alkeon Capital Management, managed by Panayotis Takis Sparaggis, holds the biggest position in Tractor Supply Company (NASDAQ:TSCO). Alkeon Capital Management has a $18.5 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which held a $16 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Glenn Russell Dubin’s Highbridge Capital Management.
Since Tractor Supply Company (NASDAQ:TSCO) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds who were dropping their entire stakes in Q1. At the top of the heap, SAC Subsidiary’s Sigma Capital Management sold off the biggest position of the “upper crust” of funds we track, totaling close to $17.7 million in stock.. Robert Joseph Caruso’s fund, Select Equity Group, also dropped its stock, about $6.4 million worth. These moves are interesting, as aggregate hedge fund interest fell by 1 funds in Q1.
What do corporate executives and insiders think about Tractor Supply Company (NASDAQ:TSCO)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past six months. Over the last 180-day time frame, Tractor Supply Company (NASDAQ:TSCO) has seen zero unique insiders purchasing, and 8 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 Tractor Supply Company (NASDAQ:TSCO). These stocks are HSN, Inc. (NASDAQ:HSNI), Sally Beauty Holdings, Inc. (NYSE:SBH), Staples, Inc. (NASDAQ:SPLS), and PetSmart, Inc. (NASDAQ:PETM). All of these stocks are in the specialty retail, other industry and their market caps match TSCO’s market cap.