Is Sterling Construction Company, Inc. (NASDAQ:STRL) ready to rally soon? Prominent investors are becoming hopeful. The number of long hedge fund positions moved up by 2 lately.
If you’d ask most investors, hedge funds are perceived as slow, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, we hone in on the masters of this club, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total asset base, and by monitoring their top stock picks, we have revealed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, bullish insider trading sentiment is another way to parse down the stock market universe. There are plenty of stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a peek at the recent action encompassing Sterling Construction Company, Inc. (NASDAQ:STRL).
What have hedge funds been doing with Sterling Construction Company, Inc. (NASDAQ:STRL)?
At the end of the first quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of 33% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in Sterling Construction Company, Inc. (NASDAQ:STRL). Royce & Associates has a $12.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $1.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Mark Broach’s Manatuck Hill Partners, John Bader’s Halcyon Asset Management and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Manatuck Hill Partners, managed by Mark Broach, established the most outsized position in Sterling Construction Company, Inc. (NASDAQ:STRL). Manatuck Hill Partners had 1.4 million invested in the company at the end of the quarter. John Bader’s Halcyon Asset Management also initiated a $0.5 million position during the quarter.
What do corporate executives and insiders think about Sterling Construction Company, Inc. (NASDAQ:STRL)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, Sterling Construction Company, Inc. (NASDAQ:STRL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Sterling Construction Company, Inc. (NASDAQ:STRL). These stocks are Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Matrix Service Co (NASDAQ:MTRX), The Goldfield Corporation (NYSEAMEX:GV), Orion Marine Group, Inc. (NYSE:ORN), and Argan, Inc. (NYSEAMEX:AGX). This group of stocks belong to the heavy construction industry and their market caps are similar to STRL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) | 17 | 1 | 2 |
| Matrix Service Co (NASDAQ:MTRX) | 11 | 0 | 3 |
| The Goldfield Corporation (NYSEAMEX:GV) | 1 | 1 | 0 |
| Orion Marine Group, Inc. (NYSE:ORN) | 10 | 0 | 2 |
| Argan, Inc. (NYSEAMEX:AGX) | 4 | 0 | 0 |
With the returns exhibited by the aforementioned time-tested strategies, retail investors should always watch hedge fund and insider trading activity, and Sterling Construction Company, Inc. (NASDAQ:STRL) applies perfectly to this mantra.
