In the eyes of many of your peers, hedge funds are seen as overrated, old investment vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds trading today, this site looks at the leaders of this group, around 525 funds. It is assumed that this group has its hands on the lion's share of the hedge fund industry's total assets, and by tracking their highest quality investments, we've formulated a few investment strategies that have historically outstripped the S&P 500. 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 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 (see all of our picks from August).
Just as crucial, positive insider trading activity is a second way to look at the world of equities. Just as you'd expect, there are lots of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
Now that that's out of the way, let's study the newest info for Flowserve Corporation (NYSE:FLS).
At the end of the second quarter, a total of 28 of the hedge funds we track were bullish in this stock, a change of 12% from one quarter earlier. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their stakes meaningfully.
According to our 13F database, Natixis Global Asset Management's Harris Associates had the biggest position in Flowserve Corporation (NYSE:FLS), worth close to $387.9 million, accounting for 0.8% of its total 13F portfolio. The second largest stake is held by Mario Gabelli of GAMCO Investors, with a $171.7 million position; 1.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Matt McLennan's First Eagle Investment Management, David Cohen and Harold Levy's Iridian Asset Management and David Harding's Winton Capital Management.
As industrywide interest increased, specific money managers have jumped into Flowserve Corporation (NYSE:FLS) headfirst. GAMCO Investors, managed by Mario Gabelli, initiated the most valuable position in Flowserve Corporation (NYSE:FLS). GAMCO Investors had 171.7 million invested in the company at the end of the quarter. Matt McLennan's First Eagle Investment Management also made a $133 million investment in the stock during the quarter. The other funds with brand new FLS positions are David Cohen and Harold Levy's Iridian Asset Management, David Harding's Winton Capital Management, and Martin D. Sass's MD Sass.
Legal insider trading, particularly when it's bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Flowserve Corporation (NYSE:FLS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).