Stoneridge, Inc. (NYSE:SRI) was in 11 hedge funds' portfolio at the end of the first quarter of 2013. SRI has seen an increase in enthusiasm from smart money of late. There were 8 hedge funds in our database with SRI positions at the end of the previous quarter.
If you'd ask most investors, hedge funds are viewed as underperforming, old investment tools of the past. While there are over 8000 funds in operation today, we look at the aristocrats of this group, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry's total capital, and by watching their highest performing equity investments, we have found a few investment strategies that have historically outpaced the broader indices. 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 (see all of our picks from August).
Equally as important, bullish insider trading activity is a second way to parse down the marketplace. Just as you'd expect, there are many incentives for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).
Now, we're going to take a look at the key action encompassing Stoneridge, Inc. (NYSE:SRI).
Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of 38% from the previous quarter. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Cannell Capital, managed by J. Carlo Cannell, holds the most valuable position in Stoneridge, Inc. (NYSE:SRI). Cannell Capital has a $6.5 million position in the stock, comprising 4.2% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which held a $2.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Ken Brodkowitz and Mike Vermut's Newland Capital, Jim Simons's Renaissance Technologies and Israel Englander's Millennium Management.
As industrywide interest jumped, key money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the most outsized position in Stoneridge, Inc. (NYSE:SRI). D E Shaw had 0.3 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron's Algert Coldiron Investors also initiated a $0.3 million position during the quarter. The following funds were also among the new SRI investors: Neil Chriss's Hutchin Hill Capital and Glenn Russell Dubin's Highbridge Capital Management.
Bullish insider trading is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the latest six-month time period, Stoneridge, Inc. (NYSE:SRI) has seen 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns exhibited by our research, everyday investors must always monitor hedge fund and insider trading sentiment, and Stoneridge, Inc. (NYSE:SRI) is an important part of this process.