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V.F. Corporation (VFC): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Is V.F. Corporation (NYSE:VFC) worth your attention right now? Investors who are in the know are selling. The number of bullish hedge fund positions shrunk by 3 in recent months.

According to most stock holders, hedge funds are seen as unimportant, old financial tools of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey look at the leaders of this club, about 450 funds. It is widely believed that this group controls the majority of the smart money’s total asset base, and by monitoring their best equity investments, we have come up with a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

David HardingEqually as beneficial, bullish insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are a number of incentives for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the recent action regarding V.F. Corporation (NYSE:VFC).

What does the smart money think about V.F. Corporation (NYSE:VFC)?

At Q1’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of -18% from the first quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.

When looking at the hedgies we track, Ric Dillon’s Diamond Hill Capital had the most valuable position in V.F. Corporation (NYSE:VFC), worth close to $160.2 million, accounting for 1.7% of its total 13F portfolio. On Diamond Hill Capital’s heels is Bronson Point Partners, managed by Larry Foley and Paul Farrell, which held a $18.5 million position; 1.5% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include David Harding’s Winton Capital Management, and D. E. Shaw’s D E Shaw.

Due to the fact that V.F. Corporation (NYSE:VFC) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of funds who sold off their entire stakes at the end of the first quarter. Interestingly, Christopher Medlock James’s Partner Fund Management sold off the largest stake of the 450+ funds we track, worth an estimated $125.3 million in stock.. Andrew Sandler’s fund, Sandler Capital Management, also cut its stock, about $17.1 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds at the end of the first quarter.

What do corporate executives and insiders think about V.F. Corporation (NYSE:VFC)?

Insider buying is best served when the company in focus has seen transactions within the past six months. Over the last six-month time period, V.F. Corporation (NYSE:VFC) has experienced zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to V.F. Corporation (NYSE:VFC). These stocks are Gildan Activewear Inc (USA) (NYSE:GIL), Under Armour Inc (NYSE:UA), Lululemon Athletica inc. (NASDAQ:LULU), PVH Corp (NYSE:PVH), and Ralph Lauren Corp (NYSE:RL). This group of stocks belong to the textile – apparel clothing industry and their market caps are similar to VFC’s market cap.

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