Is Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) a buy here? Hedge funds are in a bearish mood. The number of long hedge fund bets decreased by 3 lately.
In the 21st century investor’s toolkit, there are dozens of methods market participants can use to track stocks. A pair of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outclass their index-focused peers by a superb amount (see just how much).
Equally as beneficial, bullish insider trading sentiment is another way to break down the stock market universe. Obviously, there are lots of stimuli for an executive to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this tactic if "monkeys" know where to look (learn more here).
Keeping this in mind, we're going to take a look at the key action encompassing Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR).
Heading into 2013, a total of 20 of the hedge funds we track were bullish in this stock, a change of -13% from the third quarter. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly.
Of the funds we track, D E Shaw, managed by D. E. Shaw, holds the most valuable position in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). D E Shaw has a $79 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Tremblant Capital, managed by Brett Barakett, which held a $69 million position; 1.4% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Robert Pitts's Steadfast Capital Management, and Edward Goodnow's Goodnow Investment Group.
Due to the fact that Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has experienced falling interest from hedge fund managers, logic holds that there is a sect of funds that decided to sell off their entire stakes last quarter. Intriguingly, Dinakar Singh's TPG-AXON Management LP said goodbye to the largest stake of the 450+ funds we track, comprising about $60 million in stock.. Patrick McCormack's fund, Tiger Consumer Management, also sold off its stock, about $48 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has seen zero unique insiders buying, and 3 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 Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) 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.