Do Hedge Funds and Insiders Love The Fresh Market Inc (TFM)?

The Fresh Market Inc (NASDAQ:TFM) investors should be aware of an increase in activity from the world’s largest hedge funds recently.

If you’d ask most stock holders, hedge funds are seen as unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds trading today, we look at the aristocrats of this club, around 450 funds. It is widely believed that this group oversees the majority of all hedge funds’ total capital, and by keeping an eye on their highest performing equity investments, we have spotted a few 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as important, bullish insider trading sentiment is a second way to break down the world of equities. Obviously, there are plenty of incentives for an insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this strategy if “monkeys” know what to do (learn more here).

Now, let’s take a glance at the recent action encompassing The Fresh Market Inc (NASDAQ:TFM).

How have hedgies been trading The Fresh Market Inc (NASDAQ:TFM)?

At the end of the first quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 25% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in The Fresh Market Inc (NASDAQ:TFM). Renaissance Technologies has a $47 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Mariko Gordon of Daruma Asset Management, with a $17.6 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Sanford J. Colen’s Apex Capital, Pasco Alfaro / Richard Tumure’s Miura Global Management and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Daruma Asset Management, managed by Mariko Gordon, initiated the most valuable position in The Fresh Market Inc (NASDAQ:TFM). Daruma Asset Management had 17.6 million invested in the company at the end of the quarter. Sanford J. Colen’s Apex Capital also made a $17.1 million investment in the stock during the quarter. The following funds were also among the new TFM investors: Glenn Russell Dubin’s Highbridge Capital Management, Steven Cohen’s SAC Capital Advisors, and Abby Flamholz and Yehuda Blinder’s ADAR Investment Management.

What have insiders been doing with The Fresh Market Inc (NASDAQ:TFM)?

Insider buying is best served when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, The Fresh Market Inc (NASDAQ:TFM) has seen 1 unique insiders buying, and zero 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). All of these stocks are in the grocery stores industry and their market caps are closest to TFM’s market cap.

With the returns demonstrated by our time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and The Fresh Market Inc (NASDAQ:TFM) shareholders fit into this picture quite nicely.

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