Is Five Below Inc (NASDAQ:FIVE) the right pick for your portfolio? The best stock pickers are becoming hopeful. The number of bullish hedge fund positions increased by 1 recently.
In the eyes of most stock holders, hedge funds are perceived as slow, outdated investment tools of the past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the moguls of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top investments, we have brought to light a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, positive insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are lots of incentives for an insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if investors understand what to do (learn more here).
Consequently, it’s important to take a glance at the key action regarding Five Below Inc (NASDAQ:FIVE).
How have hedgies been trading Five Below Inc (NASDAQ:FIVE)?
In preparation for this quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Donald Chiboucis’s Columbus Circle Investors had the most valuable position in Five Below Inc (NASDAQ:FIVE), worth close to $22 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Cupps Capital Management, managed by Drew Cupps, which held a $4.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Jeffrey Vinik’s Vinik Asset Management, Neil Chriss’s Hutchin Hill Capital and Anand Parekh’s Alyeska Investment Group.
As one would reasonably expect, key hedge funds have been driving this bullishness. Columbus Circle Investors, managed by Donald Chiboucis, assembled the largest position in Five Below Inc (NASDAQ:FIVE). Columbus Circle Investors had 22 million invested in the company at the end of the quarter. Jeffrey Vinik’s Vinik Asset Management also initiated a $2.2 million position during the quarter. The following funds were also among the new FIVE investors: Neil Chriss’s Hutchin Hill Capital, Anand Parekh’s Alyeska Investment Group, and Ken Griffin’s Citadel Investment Group.
What do corporate executives and insiders think about Five Below Inc (NASDAQ:FIVE)?
Bullish insider trading is best served when the company in question has experienced transactions within the past six months. Over the last six-month time period, Five Below Inc (NASDAQ:FIVE) has seen zero unique insiders buying, and 22 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Five Below Inc (NASDAQ:FIVE). These stocks are Francesca’s Holdings Corp (NASDAQ:FRAN), HSN, Inc. (NASDAQ:HSNI), Vitamin Shoppe Inc (NYSE:VSI), Coinstar, Inc. (NASDAQ:CSTR), and Sothebys (NYSE:BID). All of these stocks are in the specialty retail, other industry and their market caps are similar to FIVE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Francesca’s Holdings Corp (NASDAQ:FRAN) | 27 | 4 | 3 |
| HSN, Inc. (NASDAQ:HSNI) | 11 | 1 | 8 |
| Vitamin Shoppe Inc (NYSE:VSI) | 16 | 2 | 3 |
| Coinstar, Inc. (NASDAQ:CSTR) | 36 | 0 | 8 |
| Sothebys (NYSE:BID) | 25 | 0 | 10 |
With the returns demonstrated by our studies, retail investors should always monitor hedge fund and insider trading activity, and Five Below Inc (NASDAQ:FIVE) applies perfectly to this mantra.
