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Do Hedge Funds and Insiders Love Harbinger Group Inc (HRG)?: Hyde Park Acquisition Corp II (HPAC), New Mountain Finance Corp. (NMFC)

Harbinger Group Inc (NYSE:HRG) investors should be aware of an increase in activity from the world’s largest hedge funds of late.

Harbinger Group Inc (NYSE:HRG)At the moment, there are many gauges shareholders can use to monitor Mr. Market. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outclass the S&P 500 by a solid margin (see just how much).

Equally as beneficial, positive insider trading activity is a second way to break down the world of equities. Just as you’d expect, there are a number of stimuli for an insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the recent action regarding Harbinger Group Inc (NYSE:HRG).

Hedge fund activity in Harbinger Group Inc (NYSE:HRG)

In preparation for this year, a total of 12 of the hedge funds we track were long in this stock, a change of 140% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Phil Falcone’s Harbinger had the biggest position in Harbinger Group Inc (NYSE:HRG), worth close to $765 million, accounting for 35.5% of its total 13F portfolio. Sitting at the No. 2 spot is Leon Cooperman of Omega Advisors, with a $38 million position; 0.7% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include James H. Litinsky’s JHL Capital Group, Chuck Royce’s Royce & Associates and Keith Meister’s Corvex Capital.

As industrywide interest jumped, specific money managers have jumped into Harbinger Group Inc (NYSE:HRG) headfirst. Omega Advisors, managed by Leon Cooperman, assembled the biggest position in Harbinger Group Inc (NYSE:HRG). Omega Advisors had 38 million invested in the company at the end of the quarter. James H. Litinsky’s JHL Capital Group also made a $11 million investment in the stock during the quarter. The following funds were also among the new HRG investors: Keith Meister’s Corvex Capital, Christian Leone’s Luxor Capital Group, and Sander Gerber’s Hudson Bay Capital Management.

How are insiders trading Harbinger Group Inc (NYSE:HRG)?

Insider buying is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, Harbinger Group Inc (NYSE:HRG) has experienced zero unique insiders purchasing, and 2 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 Harbinger Group Inc (NYSE:HRG). These stocks are Hyde Park Acquisition Corp II (NASDAQ:HPAC), New Mountain Finance Corp. (NYSE:NMFC), Lydall, Inc. (NYSE:LDL), Steel Partners Holdings LP (NYSE:SPLP), and Global Eagle Acquisition Corp (NASDAQ:ENT). This group of stocks are in the conglomerates industry and their market caps are similar to HRG’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Hyde Park Acquisition Corp II (NASDAQ:HPAC) 6 0 0
New Mountain Finance Corp. (NYSE:NMFC) 6 7 0
Lydall, Inc. (NYSE:LDL) 8 0 3
Steel Partners Holdings LP (NYSE:SPLP) 3 0 0
Global Eagle Acquisition Corp (NASDAQ:ENT) 0 0 0

With the returns exhibited by the aforementioned time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Harbinger Group Inc (NYSE:HRG) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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