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Is Cabelas Inc (NYSE:CAB) Going to Burn These Hedge Funds?

Is Cabelas Inc (NYSE:CAB) the right pick for your portfolio? Money managers are getting more bullish. The number of long hedge fund positions went up by 3 lately.

Cabelas Inc (NYSE:CAB)

If you’d ask most stock holders, hedge funds are assumed to be slow, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we choose to focus on the moguls of this club, around 450 funds. Most estimates calculate that this group oversees most of the smart money’s total capital, and by watching their top picks, we have found a number of 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 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Just as important, bullish insider trading activity is another way to parse down the financial markets. There are plenty of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).

With all of this in mind, let’s take a gander at the recent action regarding Cabelas Inc (NYSE:CAB).

What does the smart money think about Cabelas Inc (NYSE:CAB)?

In preparation for this year, a total of 17 of the hedge funds we track were long in this stock, a change of 21% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Cabelas Inc (NYSE:CAB). Fisher Asset Management has a $84 million position in the stock, comprising 0.2% of its 13F portfolio. On Fisher Asset Management’s heels is Discovery Capital Management, managed by Rob Citrone, which held a $20 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Donald Chiboucis’s Columbus Circle Investors, James Dondero’s Highland Capital Management and Bart Baum’s Ionic Capital Management.

As industrywide interest jumped, key hedge funds have jumped into Cabelas Inc (NYSE:CAB) headfirst. Discovery Capital Management, managed by Rob Citrone, initiated the most outsized position in Cabelas Inc (NYSE:CAB). Discovery Capital Management had 20 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also made a $6 million investment in the stock during the quarter. The following funds were also among the new CAB investors: Glenn Russell Dubin’s Highbridge Capital Management, Israel Englander’s Millennium Management, and Glenn Russell Dubin’s Highbridge Capital Management.

What do corporate executives and insiders think about Cabelas Inc (NYSE:CAB)?

Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Cabelas Inc (NYSE:CAB) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s studies, everyday investors must always watch hedge fund and insider trading sentiment, and Cabelas Inc (NYSE:CAB) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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