Do Hedge Funds and Insiders Love Outerwall Inc (OUTR)?

Now, according to many of your peers, hedge funds are assumed to be overrated, outdated financial vehicles of a forgotten age. Although there are over 8,000 hedge funds with their doors open today, this site focuses on the elite of this club, around 525 funds. It is assumed that this group oversees most of the hedge fund industry's total capital, and by paying attention to their highest quality picks, we've spotted a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as crucial, optimistic insider trading sentiment is a second way to look at the world of equities. Obviously, there are lots of incentives for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Furthermore, we're going to study the newest info about Outerwall Inc (NASDAQ:OUTR).

Outerwall Inc (NASDAQ:OUTR)

Hedge fund activity in Outerwall Inc (NASDAQ:OUTR)


At the end of the second quarter, a total of 28 of the hedge funds we track were long in this stock, a change of -22% from one quarter earlier. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.

When using filings from the hedgies we track, David Cohen and Harold Levy's Iridian Asset Management had the largest position in Outerwall Inc (NASDAQ:OUTR), worth close to $114.5 million, accounting for 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Debra Fine of Fine Capital Partners, with a $81.8 million position; 7.5% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Ken Fisher's Fisher Asset Management, Mario Cibelli's Marathon Partners and Peter S. Park's Park West Asset Management.

Due to the fact Outerwall Inc (NASDAQ:OUTR) has witnessed dropping sentiment from the top-tier hedge fund industry, it's safe to say that there lies a certain "tier" of hedge funds who were dropping their entire stakes at the end of the second quarter. Intriguingly, John C. Walker's Stonerise Capital Management said goodbye to the largest investment of all the hedgies we track, comprising close to $30 million in stock, and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund dumped about $14.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 8 funds at the end of the second quarter.

Insider trading activity in Outerwall


Legal insider trading, particularly when it's bullish, is best served when the company we're looking at has seen transactions within the past 180 days. Over the last 180-day time period, it has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

We'll check out the relationship between both of these indicators in other stocks similar to Outerwall Inc (NASDAQ:OUTR). These stocks are Office Depot Inc (NYSE:ODP), EZCORP Inc (NASDAQ:EZPW), Francesca's Holdings Corp (NASDAQ:FRAN), Five Below Inc (NASDAQ:FIVE), and Vitamin Shoppe Inc (NYSE:VSI). This group of stocks are in the specialty retail, other industry and their market caps resemble CSTR's market cap.
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Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

Office Depot Inc (NYSE:ODP)
27
5
1

EZCORP Inc (NASDAQ:EZPW)
18
0
4

Francesca's Holdings Corp (NASDAQ:FRAN)
15
0
3

Five Below Inc (NASDAQ:FIVE)
13
0
21

Vitamin Shoppe Inc (NYSE:VSI)
13
2
3

Using the returns explained by Insider Monkey's research, regular investors must always keep one eye on hedge fund and insider trading activity, and Outerwall is no exception.

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