M.D.C. Holdings, Inc. (NYSE:MDC) was in 12 hedge funds’ portfolio at the end of December. MDC has seen a decrease in hedge fund interest in recent months. There were 15 hedge funds in our database with MDC holdings at the end of the previous quarter.
At the moment, there are dozens of indicators investors can use to track Mr. Market. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outperform their index-focused peers by a very impressive margin (see just how much).
Just as important, bullish insider trading activity is a second way to break down the financial markets. Just as you’d expect, there are lots of stimuli for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).
Keeping this in mind, we’re going to take a gander at the latest action encompassing M.D.C. Holdings, Inc. (NYSE:MDC).
How are hedge funds trading M.D.C. Holdings, Inc. (NYSE:MDC)?
At the end of the fourth quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of -20% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in M.D.C. Holdings, Inc. (NYSE:MDC). Citadel Investment Group has a $27 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Joe DiMenna of ZWEIG DIMENNA PARTNERS, with a $13 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and David Costen Haley’s HBK Investments.
Due to the fact that M.D.C. Holdings, Inc. (NYSE:MDC) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few funds who sold off their entire stakes heading into 2013. Interestingly, Steven Cohen’s SAC Capital Advisors sold off the biggest stake of the “upper crust” of funds we watch, comprising close to $23 million in stock.. Peter J. Eichler Jr.’s fund, Aletheia Research and Management, also said goodbye to its stock, about $14 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds heading into 2013.
How have insiders been trading M.D.C. Holdings, Inc. (NYSE:MDC)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time frame, M.D.C. Holdings, Inc. (NYSE:MDC) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to M.D.C. Holdings, Inc. (NYSE:MDC). These stocks are Gafisa SA (ADR) (NYSE:GFA), Meritage Homes Corp (NYSE:MTH), The Ryland Group, Inc. (NYSE:RYL), Standard Pacific Corp. (NYSE:SPF), and KB Home (NYSE:KBH). This group of stocks are the members of the residential construction industry and their market caps match MDC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Gafisa SA (ADR) (NYSE:GFA)||5||0||0|
|Meritage Homes Corp (NYSE:MTH)||8||0||7|
|The Ryland Group, Inc. (NYSE:RYL)||15||0||5|
|Standard Pacific Corp. (NYSE:SPF)||11||0||0|
|KB Home (NYSE:KBH)||10||0||0|
With the results exhibited by our research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and M.D.C. Holdings, Inc. (NYSE:MDC) is an important part of this process.