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Is Air Methods Corp (AIRM) Going to Burn These Hedge Funds?

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Air Methods Corp (NASDAQ:AIRM) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. However, Oppenheimed announced today about raising numbers of Air Methods Corp (NASDAQ:AIRM)

Air Methods Corp (NASDAQ:AIRM)According to most investors, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are over 8000 funds in operation at the moment, we choose to focus on the upper echelon of this club, about 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total asset base, and by paying attention to their highest performing stock picks, we have unearthed a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as beneficial, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. Just as you’d expect, there are plenty of motivations for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating 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 look at the key action surrounding Air Methods Corp (NASDAQ:AIRM).

What have hedge funds been doing with Air Methods Corp (NASDAQ:AIRM)?

At year’s end, a total of 12 of the hedge funds we track were long in this stock, a change of -14% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, CR Intrinsic Investors, managed by SAC Subsidiary, holds the biggest position in Air Methods Corp (NASDAQ:AIRM). CR Intrinsic Investors has a $13 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Manatuck Hill Partners, managed by Mark Broach, which held a $12.9 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other peers that are bullish include Richard Driehaus’s Driehaus Capital, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Steven Cohen’s SAC Capital Advisors.

Since Air Methods Corp (NASDAQ:AIRM) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their entire stakes heading into 2013. At the top of the heap, Richard Schimel’s Diamondback Capital cut the largest investment of all the hedgies we watch, worth an estimated $12.7 million in stock., and Ken Heebner of Capital Growth Management was right behind this move, as the fund cut about $6.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds heading into 2013.

How have insiders been trading Air Methods Corp (NASDAQ:AIRM)?

Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, Air Methods Corp (NASDAQ:AIRM) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Air Methods Corp (NASDAQ:AIRM). These stocks are Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR), Grupo Aeroportuario del Pacifico (ADR) (NYSE:PAC), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), Grupo Aeroportuario del Centro Nort(ADR) (NASDAQ:OMAB), and Bristow Group Inc (NYSE:BRS). All of these stocks are in the air services, other industry and their market caps match AIRM’s market cap.

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