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Hedge Funds Are Betting On Greenbrier Companies Inc (GBX)

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Is Greenbrier Companies Inc (NYSE:GBX) a buy right now? The best stock pickers are taking a bullish view. The number of bullish hedge fund positions moved up by 4 in recent months.

If you’d ask most traders, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open today, we hone in on the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by paying attention to their top equity investments, we have figured out a few investment strategies that have historically outpaced 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as beneficial, positive insider trading sentiment is another way to parse down the world of equities. There are plenty of incentives for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).

With all of this in mind, let’s take a glance at the recent action encompassing Greenbrier Companies Inc (NYSE:GBX).

Hedge fund activity in Greenbrier Companies Inc (NYSE:GBX)

Heading into Q2, a total of 18 of the hedge funds we track were bullish in this stock, a change of 29% from the first quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably.

Greenbrier Companies Inc (NYSE:GBX)According to our comprehensive database, Paul Reeder and Edward Shapiro’s PAR Capital Management had the largest position in Greenbrier Companies Inc (NYSE:GBX), worth close to $38.4 million, comprising 1.2% of its total 13F portfolio. Coming in second is Scopus Asset Management, managed by Alexander Mitchell, which held a $17.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, Mario Gabelli’s GAMCO Investors and Israel Englander’s Millennium Management.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, created the most outsized position in Greenbrier Companies Inc (NYSE:GBX). Millennium Management had 6.4 million invested in the company at the end of the quarter. Richard S. Meisenberg’s ACK Asset Management also made a $5 million investment in the stock during the quarter. The other funds with new positions in the stock are Anil Stevens and Glenn Shapiro’s Parameter Capital Management, Ken Brodkowitz and Mike Vermut’s Newland Capital, and Israel Englander’s Catapult Capital Management.

What have insiders been doing with Greenbrier Companies Inc (NYSE:GBX)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last 180-day time period, Greenbrier Companies Inc (NYSE:GBX) has seen zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Greenbrier Companies Inc (NYSE:GBX). These stocks are Trinity Industries, Inc. (NYSE:TRN), Guangshen Railway Co. Ltd (ADR) (NYSE:GSH), Pacer International, Inc. (NASDAQ:PACR), FreightCar America, Inc. (NASDAQ:RAIL), and American Railcar Industries, Inc. (NASDAQ:ARII). This group of stocks belong to the railroads industry and their market caps are similar to GBX’s market cap.

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