Should You Avoid Tiffany & Co. (TIF)?

Tiffany & Co. (NYSE:TIF) was in 21 hedge funds’ portfolio at the end of March. TIF shareholders have witnessed a decrease in hedge fund interest recently. There were 29 hedge funds in our database with TIF holdings at the end of the previous quarter.

In today’s marketplace, there are many indicators investors can use to analyze their holdings. A duo of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the S&P 500 by a solid margin (see just how much).

Just as key, bullish insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are plenty of motivations for a bullish insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).

With all of this in mind, let’s take a gander at the recent action regarding Tiffany & Co. (NYSE:TIF).

How have hedgies been trading Tiffany & Co. (NYSE:TIF)?

Heading into Q2, a total of 21 of the hedge funds we track were bullish in this stock, a change of -28% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Dan Loeb’s Third Point had the biggest position in Tiffany & Co. (NYSE:TIF), worth close to $187.8 million, accounting for 3.5% of its total 13F portfolio. Coming in second is Thomas Steyer of Farallon Capital, with a $65.4 million position; 1.3% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include John A. Levin’s Levin Capital Strategies, Richard Chilton’s Chilton Investment Company and Chuck Royce’s Royce & Associates.

Judging by the fact that Tiffany & Co. (NYSE:TIF) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there were a few funds that slashed their entire stakes last quarter. Interestingly, James Crichton and Adam Weiss’s Scout Capital Management cut the largest position of the 450+ funds we key on, totaling close to $41.6 million in stock., and Alexander Mitchell of Scopus Asset Management was right behind this move, as the fund dumped about $21.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 8 funds last quarter.

What have insiders been doing with Tiffany & Co. (NYSE:TIF)?

Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, Tiffany & Co. (NYSE:TIF) has experienced 1 unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Tiffany & Co. (NYSE:TIF). These stocks are Zale Corporation (NYSE:ZLC), Blue Nile Inc (NASDAQ:NILE), Luxottica Group SpA (ADR) (NYSE:LUX), and Signet Jewelers Ltd. (NYSE:SIG). This group of stocks are the members of the jewelry stores industry and their market caps are similar to TIF’s market cap.

With the returns exhibited by our time-tested strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and Tiffany & Co. (NYSE:TIF) applies perfectly to this mantra.

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