This Metric Says You Are Smart to Sell Vera Bradley, Inc. (VRA): Steven Madden, Ltd. (SHOO), Iconix Brand Group Inc (ICON)

Is Vera Bradley, Inc. (NASDAQ:VRA) ready to raly soon? Prominent investors are in a bearish mood. The number of bullish hedge fund positions were cut by 3 lately.

In the financial world, there are many gauges market participants can use to track stocks. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outclass their index-focused peers by a significant margin (see just how much).

Equally as integral, positive insider trading sentiment is a second way to break down the financial markets. Just as you’d expect, there are plenty of incentives for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

With all of this in mind, it’s important to take a glance at the key action regarding Vera Bradley, Inc. (NASDAQ:VRA).

Hedge fund activity in Vera Bradley, Inc. (NASDAQ:VRA)

At the end of the fourth quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -21% from the third quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.

According to our comprehensive database, Daruma Asset Management, managed by Mariko Gordon, holds the largest position in Vera Bradley, Inc. (NASDAQ:VRA). Daruma Asset Management has a $43.6 million position in the stock, comprising 2.6% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $18.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Steven Cohen’s SAC Capital Advisors, Ken Griffin’s Citadel Investment Group and Thomas E. Claugus’s GMT Capital.

Judging by the fact that Vera Bradley, Inc. (NASDAQ:VRA) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedgies that elected to cut their entire stakes in Q4. At the top of the heap, Alexander Mitchell’s Scopus Asset Management said goodbye to the largest investment of the 450+ funds we key on, totaling about $7.8 million in stock.. Ward Davis and Brian Agnew’s fund, Caerus Global Investors, also sold off its stock, about $2.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds in Q4.

How have insiders been trading Vera Bradley, Inc. (NASDAQ:VRA)?

Insider buying is best served when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, Vera Bradley, Inc. (NASDAQ:VRA) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Vera Bradley, Inc. (NASDAQ:VRA). These stocks are Steven Madden, Ltd. (NASDAQ:SHOO), Iconix Brand Group Inc (NASDAQ:ICON), Tumi Holdings Inc (NYSE:TUMI), Crocs, Inc. (NASDAQ:CROX), and Skechers USA Inc (NYSE:SKX). All of these stocks are in the textile – apparel footwear & accessories industry and their market caps resemble VRA’s market cap.

With the results shown by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Vera Bradley, Inc. (NASDAQ:VRA) is an important part of this process.

Click here to learn why you should track hedge funds