Hedge Funds Are Selling The TJX Companies, Inc. (TJX)

Is The TJX Companies, Inc. (NYSE:TJX) a buy here? Investors who are in the know are in a bearish mood. The number of bullish hedge fund bets shrunk by 3 lately.

In the financial world, there are plenty of gauges shareholders can use to track the equity markets. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a significant amount (see just how much).

Just as important, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are lots of motivations for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

Now, we’re going to take a look at the latest action surrounding The TJX Companies, Inc. (NYSE:TJX).

Hedge fund activity in The TJX Companies, Inc. (NYSE:TJX)

At Q1’s end, a total of 37 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in The TJX Companies, Inc. (NYSE:TJX), worth close to $170.3 million, comprising 0.4% of its total 13F portfolio. Coming in second is Ric Dillon of Diamond Hill Capital, with a $167.7 million position; 1.8% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include D. E. Shaw’s D E Shaw, Gilchrist Berg’s Water Street Capital and Jean-Marie Eveillard’s First Eagle Investment Management.

Since The TJX Companies, Inc. (NYSE:TJX) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers that decided to sell off their full holdings in Q1. Interestingly, Ken Griffin’s Citadel Investment Group dumped the biggest investment of the 450+ funds we key on, worth about $17.6 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dumped about $13.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds in Q1.

What do corporate executives and insiders think about The TJX Companies, Inc. (NYSE:TJX)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time frame, The TJX Companies, Inc. (NYSE:TJX) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to The TJX Companies, Inc. (NYSE:TJX). These stocks are J.C. Penney Company, Inc. (NYSE:JCP), Dillard’s, Inc. (NYSE:DDS), Sears Holdings Corporation (NASDAQ:SHLD), Kohl’s Corporation (NYSE:KSS), and Macy’s, Inc. (NYSE:M). This group of stocks are in the department stores industry and their market caps match TJX’s market cap.

With the results exhibited by Insider Monkey’s strategies, retail investors should always watch hedge fund and insider trading activity, and The TJX Companies, Inc. (NYSE:TJX) is no exception.

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