Darling International Inc. (NYSE:DAR) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months.
In the 21st century investor’s toolkit, there are plenty of methods shareholders can use to track stocks. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can outclass the market by a healthy margin (see just how much).
Equally as key, bullish insider trading activity is another way to parse down the marketplace. As the old adage goes: there are plenty of motivations for an insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Now, let’s take a peek at the latest action regarding Darling International Inc. (NYSE:DAR).
Hedge fund activity in Darling International Inc. (NYSE:DAR)
Heading into 2013, a total of 14 of the hedge funds we track held long positions in this stock, a change of -18% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Ken Fisher’s Fisher Asset Management had the largest position in Darling International Inc. (NYSE:DAR), worth close to $57 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Gates Capital Management, managed by Jeffrey Gates, which held a $53 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Chuck Royce’s Royce & Associates, Martin Whitman’s Third Avenue Management and Gregg J. Powers’s Private Capital Management.
Since Darling International Inc. (NYSE:DAR) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers who were dropping their positions entirely heading into 2013. At the top of the heap, Robert Pohly’s Samlyn Capital dumped the largest investment of the 450+ funds we watch, comprising about $7 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund cut about $3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds heading into 2013.
How are insiders trading Darling International Inc. (NYSE:DAR)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last six-month time frame, Darling International Inc. (NYSE:DAR) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Darling International Inc. (NYSE:DAR). These stocks are Progressive Waste Solutions Ltd (TSE:BIN), Covanta Holding Corporation (NYSE:CVA), Clean Harbors Inc (NYSE:CLH), Heckmann Corporation (NYSE:HEK), and Waste Connections, Inc. (NYSE:WCN). All of these stocks are in the waste management industry and their market caps are similar to DAR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Progressive Waste Solutions Ltd (TSE:BIN)||10||0||0|
|Covanta Holding Corporation (NYSE:CVA)||20||0||4|
|Clean Harbors Inc (NYSE:CLH)||15||0||7|
|Heckmann Corporation (NYSE:HEK)||9||0||0|
|Waste Connections, Inc. (NYSE:WCN)||11||0||8|
With the returns demonstrated by the aforementioned strategies, retail investors must always watch hedge fund and insider trading activity, and Darling International Inc. (NYSE:DAR) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.