Apollo Investment Corp. (NASDAQ:AINV) was in 15 hedge funds’ portfolio at the end of December. AINV shareholders have witnessed an increase in hedge fund interest lately. There were 14 hedge funds in our database with AINV holdings at the end of the previous quarter.
In the 21st century investor’s toolkit, there are many methods investors can use to watch stocks. A pair of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outpace the market by a superb margin (see just how much).
Just as important, bullish insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are a variety of incentives for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).
Consequently, it’s important to take a look at the latest action encompassing Apollo Investment Corp. (NASDAQ:AINV).
What have hedge funds been doing with Apollo Investment Corp. (NASDAQ:AINV)?
Heading into 2013, a total of 15 of the hedge funds we track held long positions in this stock, a change of 7% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, James Melcher’s Balestra had the biggest position in Apollo Investment Corp. (NASDAQ:AINV), worth close to $11 million, comprising 3.9% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $10 million position; 3.9% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Robert Raiff’s Raiff Partners and John Overdeck and David Siegel’s Two Sigma Advisors.
As industrywide interest jumped, key hedge funds have jumped into Apollo Investment Corp. (NASDAQ:AINV) headfirst. Balestra, managed by James Melcher, created the most valuable position in Apollo Investment Corp. (NASDAQ:AINV). Balestra had 11 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Joel Greenblatt’s Gotham Asset Management.
What have insiders been doing with Apollo Investment Corp. (NASDAQ:AINV)?
Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past half-year. Over the latest 180-day time period, Apollo Investment Corp. (NASDAQ:AINV) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Apollo Investment Corp. (NASDAQ:AINV). These stocks are Tile Shop Hldgs, Inc. (NASDAQ:TTS), Apollo Global Management LLC (NYSE:APO), Solar Capital Ltd. (NASDAQ:SLRC), Main Street Capital Corporation (NYSE:MAIN), and A.F.P Provida SA (ADR) (NYSE:PVD). This group of stocks are the members of the diversified investments industry and their market caps match AINV’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Tile Shop Hldgs, Inc. (NASDAQ:TTS)||6||0||6|
|Apollo Global Management LLC (NYSE:APO)||7||0||2|
|Solar Capital Ltd. (NASDAQ:SLRC)||7||0||0|
|Main Street Capital Corporation (NYSE:MAIN)||4||10||2|
|A.F.P Provida SA (ADR) (NYSE:PVD)||3||0||0|
With the returns shown by Insider Monkey’s studies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Apollo Investment Corp. (NASDAQ:AINV) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.