Headwaters Inc (NYSE:HW) was in 22 hedge funds’ portfolio at the end of December. HW has seen an increase in support from the world’s most elite money managers lately. There were 15 hedge funds in our database with HW positions at the end of the previous quarter.
According to most market participants, hedge funds are seen as worthless, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their best investments, we have unearthed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as key, bullish insider trading activity is another way to break down the financial markets. As the old adage goes: there are a variety of incentives for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).
Now, let’s take a glance at the key action regarding Headwaters Inc (NYSE:HW).
How have hedgies been trading Headwaters Inc (NYSE:HW)?
At year’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of 47% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Eric Edidin and Josh Lobel’s Archer Capital Management had the largest position in Headwaters Inc (NYSE:HW), worth close to $19 million, accounting for 3% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $15 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.
Now, specific money managers were breaking ground themselves. Visium Asset Management, managed by Jacob Gottlieb, created the biggest position in Headwaters Inc (NYSE:HW). Visium Asset Management had 3 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $3 million position during the quarter. The other funds with new positions in the stock are Jeffrey Gates’s Gates Capital Management, Jean-Marie Eveillard’s First Eagle Investment Management, and John Murphy’s Alydar Capital.
What do corporate executives and insiders think about Headwaters Inc (NYSE:HW)?
Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past six months. Over the latest half-year time frame, Headwaters Inc (NYSE:HW) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the results demonstrated by our studies, everyday investors should always pay attention to hedge fund and insider trading activity, and Headwaters Inc (NYSE:HW) applies perfectly to this mantra.
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