Garmin Ltd. (NASDAQ:GRMN) investors should be aware of an increase in support from the world's most elite money managers recently.
To most investors, hedge funds are viewed as slow, old investment vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we at Insider Monkey look at the leaders of this club, about 450 funds. It is estimated that this group has its hands on the majority of all hedge funds' total capital, and by watching their top equity investments, we have uncovered a few investment strategies that have historically outperformed Mr. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to break down the financial markets. Obviously, there are a number of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if you know what to do (learn more here).
Keeping this in mind, let's take a glance at the key action surrounding Garmin Ltd. (NASDAQ:GRMN).
Heading into Q2, a total of 16 of the hedge funds we track were bullish in this stock, a change of 14% from the previous quarter. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Select Equity Group, managed by Robert Joseph Caruso, holds the biggest position in Garmin Ltd. (NASDAQ:GRMN). Select Equity Group has a $131.1 million position in the stock, comprising 1.7% of its 13F portfolio. The second largest stake is held by Daniel Bubis of Tetrem Capital Management, with a $25.4 million position; 0.8% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Jim Simons's Renaissance Technologies, David Harding's Winton Capital Management and Israel Englander's Millennium Management.
As aggregate interest increased, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, assembled the most outsized position in Garmin Ltd. (NASDAQ:GRMN). Renaissance Technologies had 22.7 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $8.5 million investment in the stock during the quarter. The following funds were also among the new GRMN investors: Joel Greenblatt's Gotham Asset Management, Jean-Marie Eveillard's First Eagle Investment Management, and Cliff Asness's AQR Capital Management.
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, Garmin Ltd. (NASDAQ:GRMN) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
With the results demonstrated by our studies, everyday investors should always watch hedge fund and insider trading activity, and Garmin Ltd. (NASDAQ:GRMN) shareholders fit into this picture quite nicely.