Hedge Funds Aren’t Crazy About Lumber Liquidators Holdings Inc (LL) Anymore

Lumber Liquidators Holdings Inc (NYSE:LL) was in 13 hedge funds’ portfolio at the end of the first quarter of 2013. LL has seen a decrease in activity from the world’s largest hedge funds of late. There were 23 hedge funds in our database with LL holdings at the end of the previous quarter.

To the average investor, there are plenty of methods investors can use to monitor their holdings. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can trounce the broader indices by a healthy margin (see just how much).

Equally as important, bullish insider trading sentiment is another way to break down the stock market universe. As the old adage goes: there are many motivations for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” understand what to do (learn more here).

Keeping this in mind, it’s important to take a peek at the recent action encompassing Lumber Liquidators Holdings Inc (NYSE:LL).

How have hedgies been trading Lumber Liquidators Holdings Inc (NYSE:LL)?

In preparation for this quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -43% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, Daruma Asset Management, managed by Mariko Gordon, holds the biggest position in Lumber Liquidators Holdings Inc (NYSE:LL). Daruma Asset Management has a $82.1 million position in the stock, comprising 4.2% of its 13F portfolio. On Daruma Asset Management’s heels is Columbus Circle Investors, managed by Donald Chiboucis, which held a $42.9 million position; 0.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Matthew Hulsizer’s PEAK6 Capital Management, Jeffrey Vinik’s Vinik Asset Management and Andrew Sandler’s Sandler Capital Management.

Seeing as Lumber Liquidators Holdings Inc (NYSE:LL) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of funds that elected to cut their positions entirely heading into Q2. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management said goodbye to the biggest stake of the “upper crust” of funds we track, totaling close to $15.8 million in stock.. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also cut its stock, about $10.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 10 funds heading into Q2.

What have insiders been doing with Lumber Liquidators Holdings Inc (NYSE:LL)?

Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the latest half-year time period, Lumber Liquidators Holdings Inc (NYSE:LL) has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Lumber Liquidators Holdings Inc (NYSE:LL). These stocks are Orchard Supply Hardware Stores Corp (NASDAQ:OSH), The Home Depot, Inc. (NYSE:HD), Lowe’s Companies, Inc. (NYSE:LOW), , and Builders FirstSource, Inc. (NASDAQ:BLDR). This group of stocks belong to the home improvement stores industry and their market caps resemble LL’s market cap.