Is Airgas, Inc. (NYSE:ARG) going to take off soon? Investors who are in the know are in a pessimistic mood. The number of bullish hedge fund bets were cut by 6 in recent months.
At the moment, there are plenty of methods investors can use to monitor publicly traded companies. A couple of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can outpace the market by a superb margin (see just how much).
Just as key, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are plenty of stimuli for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).
Keeping this in mind, let’s take a peek at the latest action surrounding Airgas, Inc. (NYSE:ARG).
What does the smart money think about Airgas, Inc. (NYSE:ARG)?
Heading into 2013, a total of 17 of the hedge funds we track were long in this stock, a change of -26% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, Merchants’ Gate Capital, managed by Jason Capello, holds the biggest position in Airgas, Inc. (NYSE:ARG). Merchants’ Gate Capital has a $224 million position in the stock, comprising 10.1% of its 13F portfolio. On Merchants’ Gate Capital’s heels is Select Equity Group, managed by Robert Joseph Caruso, which held a $140 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Richard Chilton’s Chilton Investment Company, David Harding’s Winton Capital Management and D. E. Shaw’s D E Shaw.
Judging by the fact that Airgas, Inc. (NYSE:ARG) has faced bearish sentiment from hedge fund managers, logic holds that there exists a select few fund managers who were dropping their entire stakes at the end of the year. Interestingly, Phill Gross and Robert Atchinson’s Adage Capital Management sold off the biggest investment of the “upper crust” of funds we track, comprising about $20 million in stock., and Clint Carlson of Carlson Capital was right behind this move, as the fund dropped about $18 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 6 funds at the end of the year.
How have insiders been trading Airgas, Inc. (NYSE:ARG)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time period, Airgas, Inc. (NYSE:ARG) has experienced zero unique insiders buying, and 12 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey’s tactics, retail investors must always pay attention to hedge fund and insider trading sentiment, and Airgas, Inc. (NYSE:ARG) is no exception.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.