Is Ann Inc (ANN) Going to Burn These Hedge Funds?

Is Ann Inc (NYSE:ANN) a splendid investment now? Investors who are in the know are taking a pessimistic view. The number of long hedge fund positions dropped by 3 recently.

According to most investors, hedge funds are assumed to be underperforming, old financial tools of the past. While there are greater than 8000 funds in operation today, we at Insider Monkey choose to focus on the aristocrats of this club, around 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their highest performing picks, we have deciphered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as important, optimistic insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are plenty of incentives for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this method if “monkeys” know where to look (learn more here).

Now, let’s take a peek at the latest action regarding Ann Inc (NYSE:ANN).

How are hedge funds trading Ann Inc (NYSE:ANN)?

At the end of the first quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of -14% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Jim Simons’s Renaissance Technologies had the biggest position in Ann Inc (NYSE:ANN), worth close to $38.1 million, comprising 0.1% of its total 13F portfolio. Coming in second is Tremblant Capital, managed by Brett Barakett, which held a $25.7 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Ken Griffin’s Citadel Investment Group, Clint Carlson’s Carlson Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Seeing as Ann Inc (NYSE:ANN) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers that slashed their full holdings at the end of the first quarter. At the top of the heap, David Keidan’s Buckingham Capital Management said goodbye to the largest investment of the 450+ funds we watch, comprising about $15.4 million in stock., and Brian Jackelow of SAB Capital Management was right behind this move, as the fund sold off about $11.9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds at the end of the first quarter.

Insider trading activity in Ann Inc (NYSE:ANN)

Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the last 180-day time frame, Ann Inc (NYSE:ANN) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Ann Inc (NYSE:ANN). These stocks are The Men’s Wearhouse, Inc. (NYSE:MW), Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), Express, Inc. (NYSE:EXPR), and Genesco Inc. (NYSE:GCO). This group of stocks belong to the apparel stores industry and their market caps are closest to ANN’s market cap.