Bally Technologies Inc. (NYSE:BYI) investors should be aware of a decrease in hedge fund sentiment in recent months.
If you’d ask most shareholders, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the bigwigs of this group, about 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by monitoring their highest performing stock picks, we have determined a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as important, bullish insider trading sentiment is another way to break down the financial markets. There are a number of motivations for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).
Now, let’s take a peek at the recent action surrounding Bally Technologies Inc. (NYSE:BYI).
What have hedge funds been doing with Bally Technologies Inc. (NYSE:BYI)?
In preparation for this year, a total of 20 of the hedge funds we track were bullish in this stock, a change of -17% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Empyrean Capital Partners, managed by Michael A. Price and Amos Meron, holds the largest position in Bally Technologies Inc. (NYSE:BYI). Empyrean Capital Partners has a $60 million position in the stock, comprising 1.5% of its 13F portfolio. Coming in second is P2 Capital Partners, managed by Claus Moller, which held a $53 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Paul ReederáandáEdward Shapiro’s PAR Capital Management, Jim Simons’s Renaissance Technologies and Donald Chiboucis’s Columbus Circle Investors.
Since Bally Technologies Inc. (NYSE:BYI) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Richard Chilton’s Chilton Investment Company cut the biggest investment of the 450+ funds we key on, totaling an estimated $18 million in stock.. Jeffrey Vinik’s fund, Vinik Asset Management, also sold off its stock, about $6 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 4 funds last quarter.
What have insiders been doing with Bally Technologies Inc. (NYSE:BYI)?
Insider buying is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Bally Technologies Inc. (NYSE:BYI) has seen 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s studies, retail investors should always pay attention to hedge fund and insider trading activity, and Bally Technologies Inc. (NYSE:BYI) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.