At the moment, there are dozens of indicators shareholders can use to track Mr. Market. A duo of the most useful 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 outperform the broader indices by a very impressive margin (see just how much).
Just as key, positive insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are lots of motivations for an insider to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).
With all of this in mind, let’s take a peek at the recent action encompassing Nordstrom, Inc. (NYSE:JWN).
Hedge fund activity in Nordstrom, Inc. (NYSE:JWN)
In preparation for this quarter, a total of 24 of the hedge funds we track were bullish in this stock, a change of -14% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in Nordstrom, Inc. (NYSE:JWN), worth close to $74.9 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ariel Investments, managed by John W. Rogers, which held a $44.4 million position; 0.8% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Curtis Macnguyen’s Ivory Capital (Investment Mgmt), John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
Because Nordstrom, Inc. (NYSE:JWN) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds that slashed their positions entirely in Q1. Interestingly, Lee Ainslie’s Maverick Capital dumped the largest position of all the hedgies we key on, totaling close to $68.9 million in stock., and Sanford J. Colen of Apex Capital was right behind this move, as the fund dumped about $21 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds in Q1.
Insider trading activity in Nordstrom, Inc. (NYSE:JWN)
Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Nordstrom, Inc. (NYSE:JWN) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Nordstrom, Inc. (NYSE:JWN). These stocks are Urban Outfitters, Inc. (NASDAQ:URBN), The Gap Inc. (NYSE:GPS), Ross Stores, Inc. (NASDAQ:ROST), Limited Brands, Inc. (NYSE:LTD), and Michael Kors Holdings Ltd (NYSE:KORS). This group of stocks are the members of the apparel stores industry and their market caps match JWN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Urban Outfitters, Inc. (NASDAQ:URBN) | 26 | 0 | 5 |
| The Gap Inc. (NYSE:GPS) | 26 | 0 | 7 |
| Ross Stores, Inc. (NASDAQ:ROST) | 34 | 0 | 7 |
| Limited Brands, Inc. (NYSE:LTD) | 14 | 0 | 2 |
| Michael Kors Holdings Ltd (NYSE:KORS) | 49 | 0 | 0 |
With the results exhibited by the aforementioned strategies, retail investors must always watch hedge fund and insider trading activity, and Nordstrom, Inc. (NYSE:JWN) is no exception.
