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American Railcar Industries, Inc. (NASDAQ:ARII): Are Hedge Funds Right About This Stock?

American Railcar Industries, Inc. (NASDAQ:ARII)Is American Railcar Industries, Inc. (NASDAQ:ARII) a buy right now? Hedge funds are taking a bullish view. The number of long hedge fund bets advanced by 4 in recent months.

At the moment, there are plenty of metrics shareholders can use to monitor stocks. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can trounce their index-focused peers by a superb amount (see just how much).

Just as important, optimistic insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are many reasons for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this method if you understand what to do (learn more here).

Consequently, we’re going to take a look at the key action regarding American Railcar Industries, Inc. (NASDAQ:ARII).

Hedge fund activity in American Railcar Industries, Inc. (NASDAQ:ARII)

At the end of the fourth quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of 31% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, Carl Icahn’s Icahn Capital LP had the biggest position in American Railcar Industries, Inc. (NASDAQ:ARII), worth close to $377 million, accounting for 2.9% of its total 13F portfolio. Sitting at the No. 2 spot is Paul ReederáandáEdward Shapiro of PAR Capital Management, with a $8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Alexander Mitchell’s Scopus Asset Management, Jim Simons’s Renaissance Technologies and Steven Cohen’s SAC Capital Advisors.

As aggregate interest increased, key hedge funds have jumped into American Railcar Industries, Inc. (NASDAQ:ARII) headfirst. Scopus Asset Management, managed by Alexander Mitchell, assembled the most valuable position in American Railcar Industries, Inc. (NASDAQ:ARII). Scopus Asset Management had 7 million invested in the company at the end of the quarter. Richard S. Meisenberg’s ACK Asset Management also initiated a $4 million position during the quarter. The other funds with brand new ARII positions are SAC Subsidiary’s CR Intrinsic Investors, Israel Englander’s Catapult Capital Management, and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management.

How are insiders trading American Railcar Industries, Inc. (NASDAQ:ARII)?

Insider buying is best served when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time period, American Railcar Industries, Inc. (NASDAQ:ARII) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the results shown by the aforementioned tactics, retail investors must always watch hedge fund and insider trading sentiment, and American Railcar Industries, Inc. (NASDAQ:ARII) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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