Asbury Automotive Group, Inc. (NYSE:ABG) investors should pay attention to a decrease in hedge fund sentiment of late.
In the 21st century investor’s toolkit, there are dozens of metrics market participants can use to monitor publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can beat the market by a significant amount (see just how much).
Equally as integral, positive insider trading sentiment is a second way to parse down the marketplace. There are lots of motivations for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).
With these "truths" under our belt, it's important to take a glance at the latest action regarding Asbury Automotive Group, Inc. (NYSE:ABG).
At Q1's end, a total of 16 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money's capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Glenn Fuhrman and John Phelan's MSD Capital had the most valuable position in Asbury Automotive Group, Inc. (NYSE:ABG), worth close to $115.1 million, comprising 21% of its total 13F portfolio. On MSD Capital's heels is Ricky Sandler of Eminence Capital, with a $40.1 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Daniel Gold's QVT Financial, Phill Gross and Robert Atchinson's Adage Capital Management and Cliff Asness's AQR Capital Management.
Due to the fact that Asbury Automotive Group, Inc. (NYSE:ABG) has faced declining sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of hedgies that elected to cut their full holdings at the end of the first quarter. At the top of the heap, David Keidan's Buckingham Capital Management cut the biggest investment of the 450+ funds we track, valued at about $2.3 million in stock., and Joel Greenblatt of Gotham Asset Management was right behind this move, as the fund said goodbye to about $1.9 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider buying is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time period, Asbury Automotive Group, Inc. (NYSE:ABG) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Asbury Automotive Group, Inc. (NYSE:ABG). These stocks are KAR Auction Services Inc (NYSE:KAR), Rush Enterprises, Inc. (NASDAQ:RUSHB), Sonic Automotive Inc (NYSE:SAH), Group 1 Automotive, Inc. (NYSE:GPI), and Lithia Motors Inc (NYSE:LAD). This group of stocks are in the auto dealerships industry and their market caps are similar to ABG's market cap.