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This Metric Says You Are Smart to Buy Speedway Motorsports, Inc. (TRK)

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Speedway Motorsports, Inc. (NYSE:TRK) has seen an increase in hedge fund sentiment of late.

In the eyes of most traders, hedge funds are seen as underperforming, outdated investment vehicles of the past. While there are more than 8000 funds trading today, we look at the leaders of this club, around 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top stock picks, we have unsheathed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Mario Gabelli with cereal boxEqually as key, bullish insider trading activity is a second way to parse down the world of equities. Obviously, there are a variety of incentives for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).

Consequently, let’s take a look at the recent action surrounding Speedway Motorsports, Inc. (NYSE:TRK).

How are hedge funds trading Speedway Motorsports, Inc. (NYSE:TRK)?

At Q1’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of 20% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly.

Of the funds we track, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Speedway Motorsports, Inc. (NYSE:TRK). GAMCO Investors has a $1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Joel Greenblatt’s Gotham Asset Management, D. E. Shaw’s D E Shaw and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

As aggregate interest increased, key money managers were breaking ground themselves. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, assembled the biggest position in Speedway Motorsports, Inc. (NYSE:TRK). Bryn Mawr Capital had 0.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter.

What do corporate executives and insiders think about Speedway Motorsports, Inc. (NYSE:TRK)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, Speedway Motorsports, Inc. (NYSE:TRK) has experienced 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Speedway Motorsports, Inc. (NYSE:TRK). These stocks are Dover Motorsports, Inc. (NYSE:DVD), Bowl America Incorporated (NYSEAMEX:BWL-A), Town Sports International Holdings, Inc. (NASDAQ:CLUB), Life Time Fitness, Inc. (NYSE:LTM), and International Speedway Corporation (NASDAQ:ISCA). All of these stocks are in the sporting activities industry and their market caps are similar to TRK’s market cap.

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