Restoration Hardware Holdings Inc (NYSE:RH) was in 7 hedge funds’ portfolio at the end of the first quarter of 2013. RH investors should pay attention to a decrease in hedge fund sentiment recently. There were 9 hedge funds in our database with RH positions at the end of the previous quarter.
At the moment, there are dozens of indicators shareholders can use to analyze their holdings. Two of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outperform their index-focused peers by a solid margin (see just how much).
Equally as important, bullish insider trading sentiment is a second way to parse down the financial markets. There are a variety of incentives for an insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).
Consequently, let’s take a glance at the key action regarding Restoration Hardware Holdings Inc (NYSE:RH).
How have hedgies been trading Restoration Hardware Holdings Inc (NYSE:RH)?
In preparation for this quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of -22% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Pasco Alfaro / Richard Tumure’s Miura Global Management had the biggest position in Restoration Hardware Holdings Inc (NYSE:RH), worth close to $26.7 million, accounting for 4% of its total 13F portfolio. The second largest stake is held by Scopus Asset Management, managed by Alexander Mitchell, which held a $14.6 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Ken Griffin’s Citadel Investment Group, John A. Levin’s Levin Capital Strategies and Richard Driehaus’s Driehaus Capital.
Judging by the fact that Restoration Hardware Holdings Inc (NYSE:RH) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers who sold off their full holdings last quarter. Intriguingly, David Keidan’s Buckingham Capital Management cut the largest investment of the “upper crust” of funds we monitor, worth an estimated $7.6 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund dropped about $3.1 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds last quarter.
What have insiders been doing with Restoration Hardware Holdings Inc (NYSE:RH)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Restoration Hardware Holdings Inc (NYSE:RH) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Restoration Hardware Holdings Inc (NYSE:RH). These stocks are Kirkland’s, Inc. (NASDAQ:KIRK), Gordmans Stores, Inc. (NASDAQ:GMAN), Williams-Sonoma, Inc. (NYSE:WSM), Haverty Furniture Companies, Inc. (NYSE:HVT), and Pier 1 Imports, Inc. (NYSE:PIR). This group of stocks belong to the home furnishing stores industry and their market caps match RH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Kirkland’s, Inc. (NASDAQ:KIRK) | 12 | 0 | 1 |
| Gordmans Stores, Inc. (NASDAQ:GMAN) | 7 | 0 | 0 |
| Williams-Sonoma, Inc. (NYSE:WSM) | 16 | 0 | 6 |
| Haverty Furniture Companies, Inc. (NYSE:HVT) | 10 | 0 | 12 |
| Pier 1 Imports, Inc. (NYSE:PIR) | 16 | 0 | 9 |
With the returns demonstrated by our time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Restoration Hardware Holdings Inc (NYSE:RH) applies perfectly to this mantra.
