Is Caribou Coffee Company, Inc. (NASDAQ:CBOU) worth your attention right now? The smart money is turning bullish. The number of bullish hedge fund bets advanced by 10 recently.
According to most shareholders, hedge funds are viewed as unimportant, outdated investment tools of years past. While there are more than 8000 funds in operation today, we choose to focus on the leaders of this group, about 450 funds. It is estimated that this group controls most of all hedge funds' total capital, and by tracking their top picks, we have revealed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, bullish insider trading sentiment is a second way to break down the world of equities. Just as you'd expect, there are a number of stimuli for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if piggybackers understand where to look (learn more here).
Consequently, we're going to take a gander at the recent action regarding Caribou Coffee Company, Inc. (NASDAQ:CBOU).
Heading into 2013, a total of 16 of the hedge funds we track were bullish in this stock, a change of 167% from the third quarter. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Brett Barakett's Tremblant Capital had the largest position in Caribou Coffee Company, Inc. (NASDAQ:CBOU), worth close to $32 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $12 million position; the fund has 0% of its 13F portfolio invested in the stock. Other peers that hold long positions include Robert Emil Zoellner's Alpine Associates, Clint Carlson's Carlson Capital and Sander Gerber's Hudson Bay Capital Management.
As aggregate interest increased, specific money managers have been driving this bullishness. First Eagle Investment Management, managed by Jean-Marie Eveillard, created the most outsized position in Caribou Coffee Company, Inc. (NASDAQ:CBOU). First Eagle Investment Management had 12 million invested in the company at the end of the quarter. Robert Emil Zoellner's Alpine Associates also made a $9 million investment in the stock during the quarter. The following funds were also among the new CBOU investors: Clint Carlson's Carlson Capital, Sander Gerber's Hudson Bay Capital Management, and Mario Gabelli's GAMCO Investors.
Insider buying is most useful when the company we're looking at has experienced transactions within the past six months. Over the last 180-day time frame, Caribou Coffee Company, Inc. (NASDAQ:CBOU) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey's time-tested strategies, everyday investors must always watch hedge fund and insider trading activity, and Caribou Coffee Company, Inc. (NASDAQ:CBOU) 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.