Is Constellation Brands, Inc. (NYSE:STZ) a marvelous investment right now? Prominent investors are betting on the stock. The number of bullish hedge fund positions inched up by 2 in recent months.
To most stock holders, hedge funds are assumed to be slow, old financial tools of years past. While there are more than 8000 funds in operation at present, we look at the top tier of this group, close to 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their top equity investments, we have come up with a few investment strategies that have historically outperformed the market. 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 (check out a sample of our picks).
Just as key, optimistic insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are lots of stimuli for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).
Now, let’s take a gander at the key action encompassing Constellation Brands, Inc. (NYSE:STZ).
How have hedgies been trading Constellation Brands, Inc. (NYSE:STZ)?
Heading into 2013, a total of 33 of the hedge funds we track held long positions in this stock, a change of 6% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Michael Lowenstein’s Kensico Capital had the biggest position in Constellation Brands, Inc. (NYSE:STZ), worth close to $126 million, comprising 3.8% of its total 13F portfolio. Coming in second is Sean Cullinan of Point State Capital, with a $106 million call position; 1.6% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, Dan Loeb’s Third Point and Larry Robbins’s Glenview Capital.
As aggregate interest increased, key money managers were leading the bulls’ herd. Point State Capital, managed by Sean Cullinan, established the largest call position in Constellation Brands, Inc. (NYSE:STZ). Point State Capital had 106 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $28 million position during the quarter. The other funds with new positions in the stock are Andrew Sandler’s Sandler Capital Management, Robert B. Gillam’s McKinley Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
What have insiders been doing with Constellation Brands, Inc. (NYSE:STZ)?
Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time frame, Constellation Brands, Inc. (NYSE:STZ) has experienced 2 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
With the results shown by our time-tested strategies, retail investors should always monitor hedge fund and insider trading activity, and Constellation Brands, Inc. (NYSE:STZ) applies perfectly to this mantra.
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