Is Arlington Asset Investment Corp (NYSE:AI) ready to rally soon? The best stock pickers are getting more bullish. The number of long hedge fund positions advanced by 3 lately.
If you'd ask most stock holders, hedge funds are seen as underperforming, old financial vehicles of years past. While there are over 8000 funds trading at present, we choose to focus on the moguls of this group, close to 450 funds. It is estimated that this group oversees the lion's share of the smart money's total asset base, and by tracking their highest performing stock picks, we have identified a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as integral, optimistic insider trading sentiment is another way to break down the marketplace. Obviously, there are plenty of incentives for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).
With these "truths" under our belt, we're going to take a gander at the latest action surrounding Arlington Asset Investment Corp (NYSE:AI).
Heading into Q2, a total of 9 of the hedge funds we track held long positions in this stock, a change of 50% from the previous quarter. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Jim Simons's Renaissance Technologies had the largest position in Arlington Asset Investment Corp (NYSE:AI), worth close to $9.9 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Brian Jackelow of SAB Capital Management, with a $6.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Israel Englander's Millennium Management, Andrew R. Midler's Savitr Capital and D. E. Shaw's D E Shaw.
Now, specific money managers were leading the bulls' herd. SAB Capital Management, managed by Brian Jackelow, established the largest position in Arlington Asset Investment Corp (NYSE:AI). SAB Capital Management had 6.6 million invested in the company at the end of the quarter. Brian Taylor's Pine River Capital Management also made a $0.6 million investment in the stock during the quarter. The other funds with brand new AI positions are John Fichthorn's Dialectic Capital Management, Matthew Hulsizer's PEAK6 Capital Management, and Matthew Hulsizer's PEAK6 Capital Management.
Bullish insider trading is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Arlington Asset Investment Corp (NYSE:AI) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned studies, everyday investors should always watch hedge fund and insider trading sentiment, and Arlington Asset Investment Corp (NYSE:AI) shareholders fit into this picture quite nicely.