SolarCity Corp (NASDAQ:SCTY) investors should be aware of an increase in activity from the world's largest hedge funds recently.
At the moment, there are dozens of indicators investors can use to track stocks. Some of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the S&P 500 by a healthy margin (see just how much).
Equally as beneficial, optimistic insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are lots of incentives for an executive to downsize shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
Consequently, it's important to take a gander at the latest action regarding SolarCity Corp (NASDAQ:SCTY).
At the end of the first quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 14% from the previous quarter. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, David Blood and Al Gore's Generation Investment Management had the most valuable position in SolarCity Corp (NASDAQ:SCTY), worth close to $79.9 million, accounting for 1.6% of its total 13F portfolio. On Generation Investment Management's heels is Levin Capital Strategies, managed by John A. Levin, which held a $5.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Richard Driehaus's Driehaus Capital, Philip Hempleman's Ardsley Partners and Ken Griffin's Citadel Investment Group.
Consequently, key hedge funds have jumped into SolarCity Corp (NASDAQ:SCTY) headfirst. Ardsley Partners, managed by Philip Hempleman, initiated the largest position in SolarCity Corp (NASDAQ:SCTY). Ardsley Partners had 0.9 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.5 million position during the quarter. The other funds with brand new SCTY positions are Louis Bacon's Moore Global Investments, Paul Marshall and Ian Wace's Marshall Wace LLP, and Ken Griffin's Citadel Investment Group.
Insider buying is best served when the company in question has seen transactions within the past 180 days. Over the last six-month time period, SolarCity Corp (NASDAQ:SCTY) has seen 5 unique insiders buying, 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 SolarCity Corp (NASDAQ:SCTY). These stocks are Monolithic Power Systems, Inc. (NASDAQ:MPWR), Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), SunPower Corporation (NASDAQ:SPWR), Silicon Laboratories (NASDAQ:SLAB), and Cirrus Logic, Inc. (NASDAQ:CRUS). This group of stocks are the members of the semiconductor - specialized industry and their market caps match SCTY's market cap.