Is Cintas Corporation (NASDAQ:CTAS) ready to raly soon? The best stock pickers are getting more optimistic. The number of long hedge fund bets increased by 3 in recent months.
To most shareholders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we look at the leaders of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total capital, and by monitoring their top investments, we have deciphered a number of investment strategies that have historically beaten the market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as integral, positive insider trading activity is another way to break down the stock market universe. As the old adage goes: there are plenty of motivations for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if you know where to look (learn more here).
Now, we’re going to take a glance at the latest action encompassing Cintas Corporation (NASDAQ:CTAS).
What have hedge funds been doing with Cintas Corporation (NASDAQ:CTAS)?
Heading into 2013, a total of 14 of the hedge funds we track were long in this stock, a change of 27% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Cintas Corporation (NASDAQ:CTAS). First Eagle Investment Management has a $688 million position in the stock, comprising 2.5% of its 13F portfolio. On First Eagle Investment Management’s heels is Renaissance Technologies, managed by Jim Simons, which held a $24 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include David Harding’s Winton Capital Management, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.
As aggregate interest increased, key money managers have jumped into Cintas Corporation (NASDAQ:CTAS) headfirst. D E Shaw, managed by D. E. Shaw, initiated the largest position in Cintas Corporation (NASDAQ:CTAS). D E Shaw had 7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $4 million position during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Douglas W. Case’s Advanced Investment Partners.
What do corporate executives and insiders think about Cintas Corporation (NASDAQ:CTAS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past half-year. Over the last 180-day time frame, Cintas Corporation (NASDAQ:CTAS) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Cintas Corporation (NASDAQ:CTAS). These stocks are Vantiv Inc (NYSE:VNTV), FleetCor Technologies, Inc. (NYSE:FLT), Global Payments Inc (NYSE:GPN), Alliance Data Systems Corporation (NYSE:ADS), and Rollins, Inc. (NYSE:ROL). This group of stocks are the members of the business services industry and their market caps are similar to CTAS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Vantiv Inc (NYSE:VNTV)||17||0||7|
|FleetCor Technologies, Inc. (NYSE:FLT)||19||0||20|
|Global Payments Inc (NYSE:GPN)||26||0||3|
|Alliance Data Systems Corporation (NYSE:ADS)||18||0||6|
|Rollins, Inc. (NYSE:ROL)||12||0||2|
With the results shown by Insider Monkey’s time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Cintas Corporation (NASDAQ:CTAS) 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.