In today’s marketplace, there are tons of metrics market participants can use to analyze the equity markets. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the market by a superb amount (see just how much).
Just as key, bullish insider trading activity is a second way to analyze the marketplace. Just as you'd expect, there are many stimuli for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if piggybackers understand what to do (learn more here).
Thus, let's discuss the newest info surrounding Forestar Group Inc. (NYSE:FOR).
At Q2's end, a total of 21 of the hedge funds we track were bullish in this stock, a change of 91% from one quarter earlier. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably.
When using filings from the hedgies we track, Q Investments (Specter Holdings), managed by Geoffrey Raynor, holds the biggest position in Forestar Group Inc. (NYSE:FOR). Q Investments (Specter Holdings) has a $5.7 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Israel Englander's Millennium Management, Alexander Mitchell's Scopus Asset Management and Louis Bacon's Moore Global Investments.
As industrywide interest increased, certain money managers were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, established the largest position in Forestar Group Inc. (NYSE:FOR). Citadel Investment Group had 17.5 million invested in the company at the end of the quarter. Geoffrey Raynor's Q Investments (Specter Holdings) also made a $5.7 million investment in the stock during the quarter. The following funds were also among the new FOR investors: Joshua Friedman and Mitchell Julis's Canyon Capital Advisors, Chuck Royce's Royce & Associates, and Israel Englander's Millennium Management.
Insider buying is at its handiest when the company we're looking at has seen transactions within the past 180 days. Over the latest six-month time frame, Forestar Group Inc. (NYSE:FOR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Forestar Group Inc. (NYSE:FOR). These stocks are China Hgs Real Estate Inc (NASDAQ:HGSH), Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS), Western Digital Corp. (NASDAQ:WD), Texas Pacific Land Trust (NYSE:TPL), and Summit Hotel Properties Inc (NYSE:INN). This group of stocks are the members of the real estate development industry and their market caps are closest to FOR's market cap.