Costco Wholesale Corporation (NASDAQ:COST) is billed by its bulls as a Wal-Mart killer. A 13% year-to-date return is very good for such a low-beta stock, but some rich investors appear to be taking profits now.
In today’s marketplace, there are plenty of metrics market participants can use to track stocks. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outperform their index-focused peers by a healthy amount (see just how much).
Just as key, optimistic insider trading activity is a second way to look at the world of equities. Obviously, there are lots of stimuli for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).
Furthermore, we’re going to discuss the recent info about Costco Wholesale Corporation (NASDAQ:COST).
Hedge fund activity in Costco Wholesale Corporation (NASDAQ:COST)
At the end of the second quarter, a total of 32 of the hedge funds we track held long positions in this stock, a change of -22% from the first quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings significantly.
According to our 13F database, Warren Buffett’s Berkshire Hathaway had the biggest position in Costco Wholesale Corporation (NASDAQ:COST), worth close to $479.1 million, accounting for 0.5% of its total 13F portfolio. The second largest stake is held by Panayotis Sparaggis of Alkeon Capital Management, with a $115.7 million position; 2.6% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital, Richard Chilton’s Chilton Investment Company and Jim Simons’s Renaissance Technologies.
Due to the fact Costco Wholesale Corporation (NASDAQ:COST) has experienced dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there exists a select few money managers who were dropping their positions entirely last quarter. Intriguingly, Matthew Tewksbury’s Stevens Capital Management cut the biggest investment of the “upper crust” of funds we watch, totaling close to $29.7 million in stock. Andrew Sandler’s fund, Sandler Capital Management, also cut its stock, about $28.2 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 9 funds last quarter.
What do corporate executives and insiders think about Costco Wholesale Corporation (NASDAQ:COST)?
Legal insider trading, particularly when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time frame, Costco Wholesale Corporation (NASDAQ:COST) has experienced zero unique insiders buying, and 8 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 Costco Wholesale Corporation (NASDAQ:COST). These stocks are Family Dollar Stores, Inc. (NYSE:FDO), Wal-Mart Stores, Inc. (NYSE:WMT), Dollar Tree, Inc. (NASDAQ:DLTR), Dollar General Corp. (NYSE:DG), and Target Corporation (NYSE:TGT). This group of stocks belong to the discount, variety stores industry and their market caps are closest to COST’s market cap.