Hedge Funds Are Selling Patrick Industries, Inc. (PATK)

Is Patrick Industries, Inc. (NASDAQ:PATK) an attractive investment today? The smart money is becoming less hopeful. The number of bullish hedge fund bets dropped by 1 lately.

According to most market participants, hedge funds are assumed to be unimportant, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, we look at the crème de la crème of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their best picks, we have unsheathed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 outperformed 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 sentiment is another way to parse down the world of equities. As the old adage goes: there are lots of stimuli for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a gander at the key action encompassing Patrick Industries, Inc. (NASDAQ:PATK).

What does the smart money think about Patrick Industries, Inc. (NASDAQ:PATK)?

In preparation for this quarter, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from the first quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Tontine Asset Management, managed by Jeffrey Gendell, holds the biggest position in Patrick Industries, Inc. (NASDAQ:PATK). Tontine Asset Management has a $62.7 million position in the stock, comprising 10.8% of its 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, managed by Richard Driehaus, which held a $2.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish include Andy Redleaf’s Whitebox Advisors, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Cliff Asness’s AQR Capital Management.

Seeing as Patrick Industries, Inc. (NASDAQ:PATK) has faced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of hedgies that elected to cut their positions entirely last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies sold off the biggest position of the 450+ funds we track, worth an estimated $0.8 million in stock. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

What do corporate executives and insiders think about Patrick Industries, Inc. (NASDAQ:PATK)?

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time period, Patrick Industries, Inc. (NASDAQ:PATK) has experienced 1 unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Patrick Industries, Inc. (NASDAQ:PATK) is no exception.

Click here to learn why you should track hedge funds