Crosstex Energy Inc (NASDAQ:XTXI) investors should be aware of an increase in activity from the world's largest hedge funds recently.
To most traders, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. Most estimates calculate that this group controls the lion's share of the smart money's total capital, and by keeping an eye on their best stock picks, we have figured out a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as important, positive insider trading sentiment is another way to break down the stock market universe. Just as you'd expect, there are plenty of incentives for an executive to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Consequently, let's take a peek at the key action regarding Crosstex Energy Inc (NASDAQ:XTXI).
At Q1's end, a total of 15 of the hedge funds we track held long positions in this stock, a change of 36% from the first quarter.
As industrywide interest jumped, some big names have jumped into Crosstex Energy Inc (NASDAQ:XTXI) headfirst. Driehaus Capital, managed by Richard Driehaus, created the biggest position in Crosstex Energy Inc (NASDAQ:XTXI). Driehaus Capital had 7.7 million invested in the company at the end of the quarter. John Bader's Halcyon Asset Management also made a $3 million investment in the stock during the quarter. The other funds with brand new XTXI positions are Andrew R. Midler's Savitr Capital, D. E. Shaw's D E Shaw, and Don Morgan's Brigade Capital.
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past six months. Over the last six-month time frame, Crosstex Energy Inc (NASDAQ:XTXI) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the results shown by the aforementioned research, everyday investors should always watch hedge fund and insider trading sentiment, and Crosstex Energy Inc (NASDAQ:XTXI) applies perfectly to this mantra.