Now, according to many of your fellow readers, hedge funds are assumed to be bloated, old financial vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open currently, Insider Monkey looks at the leaders of this group, about 525 funds. It is widely held that this group has its hands on most of all hedge funds' total assets, and by watching their best stock picks, we've determined a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, positive insider trading activity is another way to look at the world of equities. Obviously, there are plenty of incentives for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if "monkeys" understand what to do (learn more here).
What's more, it's important to discuss the recent info for PerkinElmer, Inc. (NYSE:PKI).
At the end of the second quarter, a total of 24 of the hedge funds we track were long in this stock, a change of -17% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in PerkinElmer, Inc. (NYSE:PKI). Royce & Associates has a $130.3 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $117.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Edgar Wachenheim's Greenhaven Associates, Robert Joseph Caruso's Select Equity Group and Clint Carlson's Carlson Capital.
Judging by the fact that PerkinElmer, Inc. (NYSE:PKI) has faced a fall in interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of funds that decided to sell off their entire stakes heading into Q2. Intriguingly, Ricky Sandler's Eminence Capital said goodbye to the biggest position of the 450+ funds we watch, worth an estimated $77.7 million in stock, and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund said goodbye to about $68.1 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds heading into Q2.
Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, PerkinElmer, Inc. (NYSE:PKI) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to PerkinElmer, Inc. (NYSE:PKI). These stocks are Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), Alere Inc (NYSE:ALR), Mettler-Toledo International Inc. (NYSE:MTD), PAREXEL International Corporation (NASDAQ:PRXL), and Covance Inc. (NYSE:CVD). All of these stocks are in the medical laboratories & research industry and their market caps resemble PKI's market cap.