To many of your fellow readers, hedge funds are assumed to be delayed, old investment tools of a period lost to current times. Although there are over 8,000 hedge funds trading today, Insider Monkey focuses on the bigwigs of this club, close to 525 funds. It is assumed that this group controls most of all hedge funds' total assets, and by keeping an eye on their highest quality investments, we've revealed a few investment strategies that have historically outperformed the broader indices. 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 33 percentage points in 11 months (explore the details and some picks here).
Just as key, bullish insider trading sentiment is another way to look at the marketplace. Just as you'd expect, there are lots of incentives for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
Furthermore, we're going to study the latest info for Colfax Corp (NYSE:CFX).
At the end of the second quarter, a total of 30 of the hedge funds we track held long positions in this stock, a change of 15% from one quarter earlier. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings substantially.
When using filings from the hedgies we track, Blue Ridge Capital, managed by John Griffin, holds the most valuable position in Colfax Corp (NYSE:CFX). Blue Ridge Capital has a $279.8 million position in the stock, comprising 3.4% of its 13F portfolio. Sitting at the No. 2 spot is Charles Akre of Akre Capital Management, with a $203.2 million position; the fund has 9.2% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Chase Coleman and Feroz Dewan's Tiger Global Management LLC, J Kevin Kenny Jr's Emerging Sovereign Group and Jonathan Auerbach's Hound Partners.
As one would understandably expect, certain money managers were breaking ground themselves. Blue Ridge Capital, managed by John Griffin, created the most valuable position in Colfax Corp (NYSE:CFX). Blue Ridge Capital had 279.8 million invested in the company at the end of the quarter. Charles Akre's Akre Capital Management also initiated a $203.2 million position during the quarter. The following funds were also among the new CFX investors: Chase Coleman and Feroz Dewan's Tiger Global Management LLC, J Kevin Kenny Jr's Emerging Sovereign Group, and Jonathan Auerbach's Hound Partners.
Bullish insider trading is best served when the company we're looking at has experienced transactions within the past 180 days. Over the last half-year time period, Colfax Corp (NYSE:CFX) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Colfax Corp (NYSE:CFX). These stocks are Xylem Inc (NYSE:XYL), Dresser-Rand Group Inc. (NYSE:DRC), Nordson Corporation (NASDAQ:NDSN), Avery Dennison Corp (NYSE:AVY), and IDEX Corporation (NYSE:IEX). This group of stocks are in the diversified machinery industry and their market caps match CFX's market cap.