Expeditors International of Washington (NASDAQ:EXPD) shareholders have witnessed a decrease in hedge fund interest in recent months.
To most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are greater than 8000 funds trading at the moment, we look at the aristocrats of this club, close to 450 funds. It is widely believed that this group has its hands on the majority of the smart money's total capital, and by keeping an eye on their highest performing picks, we have spotted a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as important, positive insider trading activity is a second way to parse down the investments you're interested in. There are a number of incentives for an executive to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if "monkeys" understand what to do (learn more here).
Now, let's take a glance at the key action surrounding Expeditors International of Washington (NASDAQ:EXPD).
Heading into 2013, a total of 24 of the hedge funds we track were bullish in this stock, a change of -4% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes considerably.
Of the funds we track, Merchants' Gate Capital, managed by Jason Capello, holds the largest position in Expeditors International of Washington (NASDAQ:EXPD). Merchants' Gate Capital has a $235 million position in the stock, comprising 10.5% of its 13F portfolio. The second largest stake is held by Charles de Vaulx of International Value Advisers, with a $193 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Ken Griffin's Citadel Investment Group, Chuck Royce's Royce & Associates and Steven Cohen's SAC Capital Advisors.
Because Expeditors International of Washington (NASDAQ:EXPD) has faced bearish sentiment from the smart money, we can see that there is a sect of hedgies that elected to cut their positions entirely at the end of the year. Intriguingly, Michael Larson's Bill & Melinda Gates Foundation Trust said goodbye to the biggest stake of the "upper crust" of funds we monitor, valued at an estimated $67 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund cut about $4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds at the end of the year.
Insider trading activity, especially when it's bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Expeditors International of Washington (NASDAQ:EXPD) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
With the returns shown by our tactics, retail investors must always monitor hedge fund and insider trading sentiment, and Expeditors International of Washington (NASDAQ:EXPD) applies perfectly to this mantra.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.