Is Body Central Corp (NASDAQ:BODY) a sound investment right now? The smart money is taking a pessimistic view. The number of long hedge fund bets retreated by 1 in recent months.
In the eyes of most investors, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the elite of this group, close to 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by paying attention to their highest performing stock picks, we have figured out a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, positive insider trading sentiment is a second way to parse down the investments you’re interested in. Obviously, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).
With all of this in mind, we’re going to take a look at the latest action surrounding Body Central Corp (NASDAQ:BODY).
What have hedge funds been doing with Body Central Corp (NASDAQ:BODY)?
In preparation for this quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -8% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, North Run Capital, managed by Thomas Ellis and Todd Hammer, holds the biggest position in Body Central Corp (NASDAQ:BODY). North Run Capital has a $14.1 million position in the stock, comprising 1.7% of its 13F portfolio. The second largest stake is held by Robert B. Gillam of McKinley Capital Management, with a $2.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Zeke Ashton’s Centaur Capital Partners and Whitney Tilson’s T2 Partners.
Judging by the fact that Body Central Corp (NASDAQ:BODY) has faced a declination in interest from the smart money, it’s safe to say that there is a sect of funds that slashed their entire stakes heading into Q2. Intriguingly, David Keidan’s Buckingham Capital Management cut the biggest investment of the “upper crust” of funds we monitor, comprising an estimated $6.7 million in stock., and Mark N. Diker of Diker Management was right behind this move, as the fund dumped about $0.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q2.
How are insiders trading Body Central Corp (NASDAQ:BODY)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past six months. Over the last half-year time period, Body Central Corp (NASDAQ:BODY) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Body Central Corp (NASDAQ:BODY). These stocks are Destination XL Group Inc (NASDAQ:DXLG), Christopher & Banks Corporation (NYSE:CBK), Cherokee Inc. (NASDAQ:CHKE), Pacific Sunwear of California, Inc. (NASDAQ:PSUN), and Citi Trends, Inc. (NASDAQ:CTRN). All of these stocks are in the apparel stores industry and their market caps are similar to BODY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Destination XL Group Inc (NASDAQ:DXLG) | 5 | 0 | 8 |
| Christopher & Banks Corporation (NYSE:CBK) | 15 | 6 | 2 |
| Cherokee Inc. (NASDAQ:CHKE) | 3 | 0 | 0 |
| Pacific Sunwear of California, Inc. (NASDAQ:PSUN) | 8 | 0 | 0 |
| Citi Trends, Inc. (NASDAQ:CTRN) | 6 | 1 | 0 |
With the returns exhibited by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading activity, and Body Central Corp (NASDAQ:BODY) applies perfectly to this mantra.
