Is Artio Global Investors Inc. (NYSE:ART) undervalued? The best stock pickers are getting less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
To most market participants, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we choose to focus on the bigwigs of this club, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by monitoring their best picks, we have discovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 24 percentage points in 7 months (see all of our picks from August).
Just as key, optimistic insider trading activity is another way to break down the investments you’re interested in. Obviously, there are plenty of motivations for an insider to sell shares of his or her company, but just one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a peek at the latest action encompassing Artio Global Investors Inc. (NYSE:ART).
How have hedgies been trading Artio Global Investors Inc. (NYSE:ART)?
At year’s end, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Tom Gayner’s Markel Gayner Asset Management had the most valuable position in Artio Global Investors Inc. (NYSE:ART), worth close to $11 million, accounting for 0.5% of its total 13F portfolio. On Markel Gayner Asset Management’s heels is Chuck Royce of Royce & Associates, with a $8 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Charles Akre’s Akre Capital Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Since Artio Global Investors Inc. (NYSE:ART) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds that elected to cut their full holdings in Q4. Interestingly, Israel Englander’s Millennium Management dropped the largest stake of the “upper crust” of funds we track, valued at an estimated $0 million in stock., and Cliff Asness of AQR Capital Management was right behind this move, as the fund said goodbye to about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Artio Global Investors Inc. (NYSE:ART)
Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Artio Global Investors Inc. (NYSE:ART) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Artio Global Investors Inc. (NYSE:ART). These stocks are Solar Senior Capital Ltd (NASDAQ:SUNS), Resource America Inc (NASDAQ:REXI), Horizon Technology Finance Corp (NASDAQ:HRZN), Gladstone Capital Corporation (NASDAQ:GLAD), and CIFC Corp (NASDAQ:CIFC). This group of stocks are the members of the asset management industry and their market caps are closest to ART’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Solar Senior Capital Ltd (NASDAQ:SUNS)||4||1||0|
|Resource America Inc (NASDAQ:REXI)||4||3||1|
|Horizon Technology Finance Corp (NASDAQ:HRZN)||2||4||0|
|Gladstone Capital Corporation (NASDAQ:GLAD)||2||0||3|
|CIFC Corp (NASDAQ:CIFC)||0||0||0|
With the returns demonstrated by our research, everyday investors must always keep an eye on hedge fund and insider trading activity, and Artio Global Investors Inc. (NYSE:ART) is no exception.