In the eyes of most traders, hedge funds are seen as unimportant, old investment tools of the past. While there are greater than 8000 funds in operation today, we at Insider Monkey choose to focus on the elite of this group, about 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by monitoring their top picks, we have identified a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, bullish insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are a number of motivations for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).
Consequently, let’s take a peek at the recent action regarding New York & Company, Inc. (NYSE:NWY).
How have hedgies been trading New York & Company, Inc. (NYSE:NWY)?
In preparation for this quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Thomas Ellis and Todd Hammer’s North Run Capital had the largest position in New York & Company, Inc. (NYSE:NWY), worth close to $20.5 million, accounting for 2.5% of its total 13F portfolio. The second largest stake is held by Cannell Capital, managed by J. Carlo Cannell, which held a $5.3 million position; the fund has 3.4% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include D. E. Shaw’s D E Shaw, Joel Greenblatt’s Gotham Asset Management and Israel Englander’s Millennium Management.
Judging by the fact that New York & Company, Inc. (NYSE:NWY) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few money managers that decided to sell off their entire stakes in Q1. Intriguingly, David Keidan’s Buckingham Capital Management cut the biggest position of the 450+ funds we track, worth an estimated $2.5 million in stock., and Mark N. Diker of Diker Management was right behind this move, as the fund said goodbye to about $0.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds in Q1.
What have insiders been doing with New York & Company, Inc. (NYSE:NWY)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest six-month time period, New York & Company, Inc. (NYSE:NWY) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to New York & Company, Inc. (NYSE:NWY). These stocks are bebe stores, inc. (NASDAQ:BEBE), Destination Maternity Corp (NASDAQ:DEST), Christopher & Banks Corporation (NYSE:CBK), The Wet Seal, Inc. (NASDAQ:WTSL), and Destination XL Group Inc (NASDAQ:DXLG). This group of stocks belong to the apparel stores industry and their market caps resemble NWY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| bebe stores, inc. (NASDAQ:BEBE) | 8 | 1 | 0 |
| Destination Maternity Corp (NASDAQ:DEST) | 12 | 0 | 4 |
| Christopher & Banks Corporation (NYSE:CBK) | 15 | 6 | 2 |
| The Wet Seal, Inc. (NASDAQ:WTSL) | 12 | 1 | 0 |
| Destination XL Group Inc (NASDAQ:DXLG) | 5 | 0 | 8 |
With the returns shown by Insider Monkey’s strategies, retail investors must always watch hedge fund and insider trading activity, and New York & Company, Inc. (NYSE:NWY) applies perfectly to this mantra.
