Should You Avoid Vitamin Shoppe Inc (VSI)?

Is it smart to be bullish on Vitamin Shoppe Inc (NYSE:VSI)?

At the moment, there are dozens of gauges market participants can use to monitor stocks. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outclass their index-focused peers by a solid amount (see just how much).

Equally as useful, bullish insider trading sentiment is a second way to analyze the world of equities. Just as you’d expect, there are many motivations for a bullish insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).

Furthermore, we’re going to examine the latest info about Vitamin Shoppe Inc (NYSE:VSI).

How have hedgies been trading Vitamin Shoppe Inc (NYSE:VSI)?

At Q2’s end, a total of 13 of the hedge funds we track were long in this stock, a change of -19% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

When using filings from the hedgies we track, Robert Joseph Caruso’s Select Equity Group had the most valuable position in Vitamin Shoppe Inc (NYSE:VSI), worth close to $103.8 million, comprising 1.5% of its total 13F portfolio. On Select Equity Group’s heels is Chase Coleman and Feroz Dewan of Tiger Global Management LLC, with a $29.1 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Clint Carlson’s Carlson Capital and Israel Englander’s Millennium Management.

Judging by the fact that Vitamin Shoppe Inc (NYSE:VSI) has witnessed bearish sentiment from the smart money’s best and brightest, logic holds that there lies a certain “tier” of money managers that slashed their full holdings at the end of the second quarter. It’s worth mentioning that Louis Bacon’s Moore Global Investments sold off the biggest stake of all the hedgies we watch, valued at an estimated $4.9 million in stock. Alexander Mitchell’s fund, Scopus Asset Management, also dumped its stock, about $2.7 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds at the end of the second quarter.

What have insiders been doing with Vitamin Shoppe Inc (NYSE:VSI)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in question has seen transactions within the past 180 days. Over the last six-month time period, Vitamin Shoppe Inc (NYSE:VSI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Vitamin Shoppe Inc (NYSE:VSI). These stocks are Five Below Inc (NASDAQ:FIVE), Office Depot Inc (NYSE:ODP), EZCORP Inc (NASDAQ:EZPW), Francesca’s Holdings Corp (NASDAQ:FRAN), and Coinstar, Inc. (NASDAQ:CSTR). This group of stocks are the members of the specialty retail, other industry and their market caps are similar to VSI’s market cap.