Is American Greetings Corporation (AM) Going to Burn These Hedge Funds?

What’s a smart American Greetings Corporation (NYSE:AM) investor to do?

In the financial world, there are tons of methods investors can use to watch the equity markets. Two of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can trounce the broader indices by a solid margin (see just how much).

Just as necessary, optimistic insider trading sentiment is a second way to analyze the stock market universe. Just as you’d expect, there are plenty of stimuli for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).

What’s more, let’s examine the latest info surrounding American Greetings Corporation (NYSE:AM).

Hedge fund activity in American Greetings Corporation (NYSE:AM)

In preparation for the third quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -44% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably.

According to our 13F database, Cliff Asness’s AQR Capital Management had the biggest position in American Greetings Corporation (NYSE:AM), worth close to $24.8 million, comprising 0.1% of its total 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $11.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and Paul Marshall and Ian Wace’s Marshall Wace LLP.

As American Greetings Corporation (NYSE:AM) has witnessed declining interest from upper-tier hedge fund managers, logic holds that there was a specific group of hedge funds who sold off their positions entirely last quarter. At the top of the heap, Matthew Halbower’s Pentwater Capital Management sold off the biggest position of all the hedgies we monitor, comprising an estimated $8.9 million in stock. David Gallo’s fund, Valinor Management LLC, also said goodbye to its stock, about $5.8 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 8 funds last quarter.

What do corporate executives and insiders think about American Greetings Corporation (NYSE:AM)?

Bullish insider trading is best served when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, American Greetings Corporation (NYSE:AM) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to American Greetings Corporation (NYSE:AM). These stocks are MarineMax, Inc. (NYSE:HZO), Zumiez Inc. (NASDAQ:ZUMZ), Brown Shoe Company, Inc. (NYSE:BWS), Titan Machinery Inc. (NASDAQ:TITN), and United Online, Inc. (NASDAQ:UNTD). This group of stocks belong to the specialty retail, other industry and their market caps are closest to AM’s market cap.

Using the returns explained by our analyses, regular investors should always watch hedge fund and insider trading sentiment, and American Greetings Corporation (NYSE:AM) is no exception.

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