Pacer International, Inc. (NASDAQ:PACR) shareholders have witnessed an increase in hedge fund sentiment of late.
To most investors, hedge funds are viewed as slow, old investment vehicles of the past. While there are over 8000 funds in operation at present, we choose to focus on the leaders of this group, close to 450 funds. It is estimated that this group controls the majority of all hedge funds’ total capital, and by watching their top stock picks, we have discovered a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as beneficial, positive insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are a variety of reasons for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand where to look (learn more here).
Consequently, we’re going to take a gander at the recent action encompassing Pacer International, Inc. (NASDAQ:PACR).
Hedge fund activity in Pacer International, Inc. (NASDAQ:PACR)
At the end of the first quarter, a total of 11 of the hedge funds we track held long positions in this stock, a change of 22% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Pacer International, Inc. (NASDAQ:PACR), worth close to $4.3 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Matthew Drapkin and Steven R. Becker of Becker Drapkin Management, with a $3.3 million position; 2.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include David Moradi’s Anthion Management, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, key money managers have been driving this bullishness. Becker Drapkin Management, managed by Matthew Drapkin and Steven R. Becker, initiated the largest position in Pacer International, Inc. (NASDAQ:PACR). Becker Drapkin Management had 3.3 million invested in the company at the end of the quarter. David Moradi’s Anthion Management also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Griffin’s Citadel Investment Group.
Insider trading activity in Pacer International, Inc. (NASDAQ:PACR)
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, Pacer International, Inc. (NASDAQ:PACR) has seen 5 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Pacer International, Inc. (NASDAQ:PACR). These stocks are Guangshen Railway Co. Ltd (ADR) (NYSE:GSH), American Railcar Industries, Inc. (NASDAQ:ARII), Greenbrier Companies Inc (NYSE:GBX), Providence & Worcester Railroad Company (NASDAQ:PWX), and FreightCar America, Inc. (NASDAQ:RAIL). This group of stocks are in the railroads industry and their market caps resemble PACR’s market cap.