Aaron’s, Inc. (NYSE:AAN) has experienced an increase in enthusiasm from smart money lately.
To most investors, hedge funds are viewed as unimportant, outdated financial tools of years past. While there are more than 8000 funds trading at the moment, we at Insider Monkey choose to focus on the crème de la crème of this club, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by paying attention to their top stock picks, we have identified a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as key, positive insider trading sentiment is another way to parse down the stock market universe. Just as you’d expect, there are many incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Consequently, let’s take a glance at the latest action surrounding Aaron’s, Inc. (NYSE:AAN).
What does the smart money think about Aaron’s, Inc. (NYSE:AAN)?
In preparation for this year, a total of 15 of the hedge funds we track were bullish in this stock, a change of 36% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Aaron’s, Inc. (NYSE:AAN). GAMCO Investors has a $31.4 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Diamond Hill Capital, managed by Ric Dillon, which held a $16.9 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.
Now, specific money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, initiated the most valuable position in Aaron’s, Inc. (NYSE:AAN). Renaissance Technologies had 12.6 million invested in the company at the end of the quarter. Thomas E. Claugus’s GMT Capital also initiated a $6.4 million position during the quarter. The other funds with new positions in the stock are Jeffrey Vinik’s Vinik Asset Management, Glenn Russell Dubin’s Highbridge Capital Management, and Steven Cohen’s SAC Capital Advisors.
How have insiders been trading Aaron’s, Inc. (NYSE:AAN)?
Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, Aaron’s, Inc. (NYSE:AAN) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Aaron’s, Inc. (NYSE:AAN). These stocks are Air Lease Corp (NYSE:AL), GATX Corporation (NYSE:GMT), Textainer Group Holdings Limited (NYSE:TGH), and Rent-A-Center Inc (NASDAQ:RCII). This group of stocks belong to the rental & leasing services industry and their market caps are closest to AAN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Air Lease Corp (NYSE:AL)||15||1||1|
|GATX Corporation (NYSE:GMT)||12||2||6|
|Textainer Group Holdings Limited (NYSE:TGH)||11||0||0|
|Rent-A-Center Inc (NASDAQ:RCII)||16||0||2|
With the returns exhibited by our research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Aaron’s, Inc. (NYSE:AAN) shareholders fit into this picture quite nicely.