If you were to ask many of your peers, hedge funds are assumed to be bloated, outdated financial tools of a period lost to current times. Although there are In excess of 8,000 hedge funds trading currently, this site aim at the upper echelon of this club, about 525 funds. It is widely held that this group oversees most of all hedge funds' total capital, and by keeping an eye on their best picks, we've unearthed a few investment strategies that have historically beaten the broader indices. 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as necessary, positive insider trading sentiment is another way to analyze the financial markets. Just as you'd expect, there are lots of motivations for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if "monkeys" know where to look (learn more here).
Thus, let's analyze the recent info for REGAL-BELOIT CORPORATION (NYSE:RBC).
Heading into Q3, a total of 16 of the hedge funds we track held long positions in this stock, a change of 23% from the first quarter. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly.
Out of the hedge funds we follow, Ken Fisher's Fisher Asset Management had the largest position in REGAL-BELOIT CORPORATION (NYSE:RBC), worth close to $40.2 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Impax Asset Management, managed by Ian Simm, which held a $35.6 million position; 4.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Chuck Royce's Royce & Associates, Glenn Russell Dubin's Highbridge Capital Management and Cliff Asness's AQR Capital Management.
As aggregate interest spiked, certain bigger names were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, initiated the most outsized position in REGAL-BELOIT CORPORATION (NYSE:RBC). Fisher Asset Management had 40.2 million invested in the company at the end of the quarter. Ian Simm's Impax Asset Management also made a $35.6 million investment in the stock during the quarter. The other funds with brand new RBC positions are Chuck Royce's Royce & Associates, Glenn Russell Dubin's Highbridge Capital Management, and Cliff Asness's AQR Capital Management.
Bullish insider trading is most useful when the primary stock in question has seen transactions within the past six months. Over the latest half-year time period, REGAL-BELOIT CORPORATION (NYSE:RBC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to REGAL-BELOIT CORPORATION (NYSE:RBC). These stocks are General Cable Corporation (NYSE:BGC), EnerSys (NYSE:ENS), Belden Inc. (NYSE:BDC), Woodward Inc (NASDAQ:WWD), and A. O. Smith Corporation (NYSE:AOS). This group of stocks are in the industrial electrical equipment industry and their market caps are closest to RBC's market cap.