Rite Aid Corporation (NYSE:RAD) was in 18 hedge funds’ portfolio at the end of the fourth quarter of 2012. RAD has experienced a decrease in activity from the world’s largest hedge funds of late. There were 22 hedge funds in our database with RAD positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are dozens of indicators market participants can use to monitor Mr. Market. A duo of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a solid amount (see just how much).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the financial markets. Obviously, there are many incentives for a bullish insider to drop 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 tactic if “monkeys” know where to look (learn more here).
With all of this in mind, it’s important to take a look at the latest action regarding Rite Aid Corporation (NYSE:RAD).
Hedge fund activity in Rite Aid Corporation (NYSE:RAD)
At year’s end, a total of 18 of the hedge funds we track were bullish in this stock, a change of -18% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings significantly.
Of the funds we track, Mouth Kellett Capital Management, managed by Mark McGoldrick and Jason Maynard, holds the largest position in Rite Aid Corporation (NYSE:RAD). Mouth Kellett Capital Management has a $47 million position in the stock, comprising 6% of its 13F portfolio. The second largest stake is held by Bruce J. Richards and Louis Hanover of Marathon Asset Management, with a $23 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Don Morgan’s Brigade Capital, Boaz Weinstein’s Saba Capital and D. E. Shaw’s D E Shaw.
Due to the fact that Rite Aid Corporation (NYSE:RAD) has faced bearish sentiment from the smart money, we can see that there was a specific group of funds who were dropping their positions entirely in Q4. It’s worth mentioning that Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital sold off the largest stake of the 450+ funds we key on, valued at an estimated $54 million in stock.. Jeffrey Tannenbaum’s fund, Fir Tree, also dumped its stock, about $10 million worth. These moves are interesting, as total hedge fund interest was cut by 4 funds in Q4.
How are insiders trading Rite Aid Corporation (NYSE:RAD)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has seen transactions within the past six months. Over the last six-month time frame, Rite Aid Corporation (NYSE:RAD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading activity, and Rite Aid Corporation (NYSE:RAD) is an important part of this process.
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