Is 7 DAYS GROUP HOLDINGS LIMITED (ADR) (NYSE:SVN) the right investment to pursue these days? The smart money is in an optimistic mood. The number of bullish hedge fund positions moved up by 1 lately.
In the eyes of most stock holders, hedge funds are assumed to be slow, old investment vehicles of the past. While there are over 8000 funds trading at present, we choose to focus on the bigwigs of this club, close to 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top picks, we have deciphered a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, bullish insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are plenty of stimuli for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the key action surrounding 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN).
Hedge fund activity in 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN)
At year’s end, a total of 12 of the hedge funds we track were long in this stock, a change of 9% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Brett Barakett’s Tremblant Capital had the most valuable position in 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN), worth close to $10.8 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Thomas Steyer of Farallon Capital, with a $7.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Brian Taylor’s Pine River Capital Management, James Dinan’s York Capital Management and Spencer M. Waxman’s Shannon River Fund Management.
As aggregate interest increased, specific money managers have been driving this bullishness. Farallon Capital, managed by Thomas Steyer, assembled the biggest position in 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN). Farallon Capital had 7.7 million invested in the company at the end of the quarter. Brian Taylor’s Pine River Capital Management also initiated a $5.3 million position during the quarter. The other funds with brand new SVN positions are John Overdeck and David Siegel’s Two Sigma Advisors and John Arnold’s Centaurus Advisors.
What have insiders been doing with 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN)?
Bullish insider trading is particularly usable when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN). These stocks are Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), Morgans Hotel Group Co. (NASDAQ:MHGC), Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN), Orient-Express Hotels Ltd. (NYSE:OEH), and China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). This group of stocks are in the lodging industry and their market caps match SVN’s market cap.