This Metric Says You Are Smart to Sell Body Central Corp (BODY)

Body Central Corp (NASDAQ:BODY) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. BODY has seen a decrease in activity from the world’s largest hedge funds lately. There were 9 hedge funds in our database with BODY positions at the end of the previous quarter; in our experience, this is a bearish indicator.

To the average investor, there are a multitude of indicators investors can use to track publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can beat the S&P 500 by a solid amount (see just how much).

Just as integral, positive insider trading activity is a second way to parse down the stock market universe. There are a number of incentives for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this method if you know where to look (learn more here).

With these “truths” under our belt, let’s take a glance at the recent action encompassing Body Central Corp (NASDAQ:BODY).

Hedge fund activity in Body Central Corp (NASDAQ:BODY)

At the end of the fourth quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, North Run Capital, managed by Thomas Ellis and Todd Hammer, holds the most valuable position in Body Central Corp (NASDAQ:BODY). North Run Capital has a $14 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is David Keidan of Buckingham Capital Management, with a $6.7 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Robert B. Gillam’s McKinley Capital Management, Zeke Ashton’s Centaur Capital Partners and Whitney Tilson’s T2 Partners.

Seeing as Body Central Corp (NASDAQ:BODY) has witnessed falling interest from the aggregate hedge fund industry, we can see that there exists a select few hedgies that slashed their positions entirely at the end of the year. It’s worth mentioning that Joel Greenblatt’s Gotham Asset Management cut the biggest position of the 450+ funds we monitor, worth an estimated $0.8 million in stock.. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.3 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Body Central Corp (NASDAQ:BODY)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Body Central Corp (NASDAQ:BODY) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Body Central Corp (NASDAQ:BODY). These stocks are Christopher & Banks Corporation (NYSE:CBK), Cherokee Inc. (NASDAQ:CHKE), Pacific Sunwear of California, Inc. (NASDAQ:PSUN), and Citi Trends, Inc. (NASDAQ:CTRN). This group of stocks belong to the apparel stores industry and their market caps match BODY’s market cap.

With the results exhibited by our tactics, retail investors should always watch hedge fund and insider trading sentiment, and Body Central Corp (NASDAQ:BODY) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds