Roundy’s Inc (RNDY): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Roundy’s Inc (NYSE:RNDY) investors should be aware of a decrease in enthusiasm from smart money in recent months.

In today’s marketplace, there are a multitude of metrics market participants can use to analyze Mr. Market. Some of the most underrated 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 outclass the S&P 500 by a solid amount (see just how much).

Equally as key, optimistic insider trading activity is another way to break down the financial markets. Just as you’d expect, there are lots of reasons for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the key action surrounding Roundy’s Inc (NYSE:RNDY).

Hedge fund activity in Roundy’s Inc (NYSE:RNDY)

Heading into Q2, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

According to our comprehensive database, Millennium Management, managed by Israel Englander, holds the largest position in Roundy’s Inc (NYSE:RNDY). Millennium Management has a $0.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Ken Griffin’s Citadel Investment Group, Bill Miller’s Legg Mason Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Seeing as Roundy’s Inc (NYSE:RNDY) has faced a declination in interest from the smart money, logic holds that there were a few funds that decided to sell off their entire stakes heading into Q2. Interestingly, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC cut the largest position of all the hedgies we monitor, totaling about $2.8 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dropped about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds heading into Q2.

How have insiders been trading Roundy’s Inc (NYSE:RNDY)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time frame, Roundy’s Inc (NYSE:RNDY) has seen 5 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Roundy’s Inc (NYSE:RNDY). These stocks are Core-Mark Holding Company, Inc. (NASDAQ:CORE), Ingles Markets, Incorporated (NASDAQ:IMKTA), Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC), Arden Group, Inc. (NASDAQ:ARDNA), and The Pantry, Inc. (NASDAQ:PTRY). This group of stocks belong to the grocery stores industry and their market caps are similar to RNDY’s market cap.

With the returns shown by our time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Roundy’s Inc (NYSE:RNDY) is no exception.

Click here to learn why you should track hedge funds