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This Metric Says You Are Smart to Buy TravelCenters of America LLC (TA)

TravelCenters of America LLC (NYSEAMEX:TA)TravelCenters of America LLC (NYSEAMEX:TA) was in 10 hedge funds’ portfolio at the end of March. TA has seen an increase in enthusiasm from smart money of late. There were 8 hedge funds in our database with TA holdings at the end of the previous quarter.

In the eyes of most market participants, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, we choose to focus on the upper echelon of this club, around 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by paying attention to their best equity investments, we have spotted a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 (see the details here).

Equally as key, positive insider trading activity is another way to break down the investments you’re interested in. As the old adage goes: there are a number of reasons for an executive to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

Now, we’re going to take a peek at the recent action regarding TravelCenters of America LLC (NYSEAMEX:TA).

What does the smart money think about TravelCenters of America LLC (NYSEAMEX:TA)?

Heading into Q2, a total of 10 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, Jim Simons’s Renaissance Technologies had the biggest position in TravelCenters of America LLC (NYSEAMEX:TA), worth close to $11.7 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is D E Shaw, managed by D. E. Shaw, which held a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Andy Redleaf’s Whitebox Advisors, and Glenn Russell Dubin’s Highbridge Capital Management.

Consequently, specific money managers have been driving this bullishness. PEAK6 Capital Management, managed by Matthew Hulsizer, created the biggest call position in TravelCenters of America LLC (NYSEAMEX:TA). PEAK6 Capital Management had 1.2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0.7 million position during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and Israel Englander’s Millennium Management.

How have insiders been trading TravelCenters of America LLC (NYSEAMEX:TA)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time period, TravelCenters of America LLC (NYSEAMEX:TA) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s tactics, retail investors must always watch hedge fund and insider trading activity, and TravelCenters of America LLC (NYSEAMEX:TA) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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