Is Beazer Homes USA, Inc. (NYSE:BZH) a superb stock to buy now? The best stock pickers are taking a bullish view. The number of long hedge fund positions went up by 1 recently.
In the 21st century investor’s toolkit, there are dozens of gauges market participants can use to analyze Mr. Market. Two of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a significant amount (see just how much).
Just as beneficial, positive insider trading activity is another way to parse down the marketplace. Just as you'd expect, there are a variety of incentives for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive 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 recent action encompassing Beazer Homes USA, Inc. (NYSE:BZH).
At the end of the fourth quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 7% from the third quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Glenn Russell Dubin's Highbridge Capital Management had the most valuable position in Beazer Homes USA, Inc. (NYSE:BZH), worth close to $27 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by David Tepper of Appaloosa Management LP, with a $22 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Randall Smith's Alden Global Capital, Donald Chiboucis's Columbus Circle Investors and Don Morgan's Brigade Capital.
As industrywide interest jumped, key money managers have jumped into Beazer Homes USA, Inc. (NYSE:BZH) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the most valuable position in Beazer Homes USA, Inc. (NYSE:BZH). Highbridge Capital Management had 27 million invested in the company at the end of the quarter. David Tepper's Appaloosa Management LP also initiated a $22 million position during the quarter. The other funds with new positions in the stock are Randall Smith's Alden Global Capital, Donald Chiboucis's Columbus Circle Investors, and Don Morgan's Brigade Capital.
Bullish insider trading is particularly usable when the company we're looking at has seen transactions within the past half-year. Over the last six-month time period, Beazer Homes USA, Inc. (NYSE:BZH) has experienced 9 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey's research, everyday investors must always pay attention to hedge fund and insider trading activity, and Beazer Homes USA, Inc. (NYSE:BZH) is an important part of this process.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.