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

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Speedway Motorsports, Inc. (NYSE:TRK) was in 5 hedge funds’ portfolio at the end of the fourth quarter of 2012. TRK has experienced a decrease in activity from the world’s largest hedge funds recently. There were 7 hedge funds in our database with TRK positions at the end of the previous quarter.

Speedway Motorsports, Inc. (NYSE:TRK)

According to most stock holders, hedge funds are assumed to be slow, old investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, we choose to focus on the leaders of this club, close to 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total capital, and by watching their highest performing stock picks, we have discovered a few investment strategies that have historically outstripped Mr. 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as beneficial, positive insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are lots of reasons for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action encompassing Speedway Motorsports, Inc. (NYSE:TRK).

Hedge fund activity in Speedway Motorsports, Inc. (NYSE:TRK)

At the end of the fourth quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of -29% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, GAMCO Investors, managed by Mario Gabelli, holds the largest 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 Jim Simons of Renaissance Technologies, with a $0.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Joel Greenblatt’s Gotham Asset Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.

Because Speedway Motorsports, Inc. (NYSE:TRK) has faced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that slashed their full holdings at the end of the year. It’s worth mentioning that Mark Travis’s Intrepid Capital Management dumped the largest position of the “upper crust” of funds we monitor, valued at about $17.2 million in stock.. Israel Englander’s fund, Millennium Management, also cut its stock, about $0.4 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds at the end of the year.

What have insiders been doing with Speedway Motorsports, Inc. (NYSE:TRK)?

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Speedway Motorsports, Inc. (NYSE:TRK) has seen 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). This group of stocks are the members of the sporting activities industry and their market caps are similar to TRK’s market cap.

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