Is Raven Industries, Inc. (NASDAQ:RAVN) the right pick for your portfolio? The best stock pickers are getting less optimistic. The number of long hedge fund positions were cut by 2 in recent months.
If you’d ask most traders, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the moguls of this club, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by watching their best equity investments, we have come up with a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as beneficial, positive insider trading activity is another way to break down the investments you’re interested in. Obviously, there are many stimuli for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).
Keeping this in mind, let’s take a peek at the latest action encompassing Raven Industries, Inc. (NASDAQ:RAVN).
How are hedge funds trading Raven Industries, Inc. (NASDAQ:RAVN)?
At Q1’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of -22% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in Raven Industries, Inc. (NASDAQ:RAVN), worth close to $51.2 million, accounting for 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Mario Gabelli of GAMCO Investors, with a $2.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Joel Greenblatt’s Gotham Asset Management.
Since Raven Industries, Inc. (NASDAQ:RAVN) has experienced falling interest from the aggregate hedge fund industry, logic holds that there is a sect of hedgies who were dropping their full holdings at the end of the first quarter. Interestingly, Jim Simons’s Renaissance Technologies dropped the biggest investment of the 450+ funds we key on, totaling close to $1.8 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $1.3 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds at the end of the first quarter.
How have insiders been trading Raven Industries, Inc. (NASDAQ:RAVN)?
Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Raven Industries, Inc. (NASDAQ:RAVN) has experienced zero unique insiders purchasing, 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 Raven Industries, Inc. (NASDAQ:RAVN). These stocks are Park Electrochemical Corp. (NYSE:PKE), TTM Technologies, Inc. (NASDAQ:TTMI), Plexus Corp. (NASDAQ:PLXS), Benchmark Electronics, Inc. (NYSE:BHE), and Celestica Inc. (USA) (NYSE:CLS). This group of stocks are the members of the printed circuit boards industry and their market caps match RAVN’s market cap.