Standard Pacific Corp. (NYSE:SPF) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late.
If you’d ask most shareholders, hedge funds are viewed as underperforming, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, we look at the top tier of this group, close to 450 funds. It is estimated that this group has its hands on most of the smart money’s total asset base, and by watching their best equity investments, we have unearthed a few investment strategies that have historically outpaced 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as integral, optimistic insider trading activity is a second way to break down the financial markets. As the old adage goes: there are plenty of stimuli for an insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
With all of this in mind, we’re going to take a glance at the recent action surrounding Standard Pacific Corp. (NYSE:SPF).
Hedge fund activity in Standard Pacific Corp. (NYSE:SPF)
At the end of the first quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of 58% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Standard Pacific Corp. (NYSE:SPF). Citadel Investment Group has a $21.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Alden Global Capital, managed by Randall Smith, which held a $17.3 million position; 3% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Ken Heebner’s Capital Growth Management, Bruce Kovner’s Caxton Associates LP and Donald Chiboucis’s Columbus Circle Investors.
As aggregate interest increased, specific money managers were breaking ground themselves. Caxton Associates LP, managed by Bruce Kovner, created the most valuable position in Standard Pacific Corp. (NYSE:SPF). Caxton Associates LP had 9.9 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $3.9 million position during the quarter. The following funds were also among the new SPF investors: Dmitry Balyasny’s Balyasny Asset Management, Morris Mark’s Mark Asset Management, and Sean Cullinan’s Point State Capital.
Insider trading activity in Standard Pacific Corp. (NYSE:SPF)
Bullish insider trading is best served when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, Standard Pacific Corp. (NYSE:SPF) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Standard Pacific Corp. (NYSE:SPF). These stocks are Gafisa SA (ADR) (NYSE:GFA), Meritage Homes Corp (NYSE:MTH), M.D.C. Holdings, Inc. (NYSE:MDC), The Ryland Group, Inc. (NYSE:RYL), and KB Home (NYSE:KBH). This group of stocks are the members of the residential construction industry and their market caps resemble SPF’s market cap.