To many of your fellow readers, hedge funds are seen as bloated, outdated financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey looks at the masters of this club, around 525 funds. It is widely held that this group controls most of the hedge fund industry’s total capital, and by tracking their best investments, we’ve identified a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced 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 33 percentage points in 11 months (see all of our picks from August).
Just as key, optimistic insider trading activity is a second way to analyze the marketplace. Just as you’d expect, there are a variety of incentives for an executive 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 strategy if investors understand what to do (learn more here).
What’s more, it’s important to analyze the recent info surrounding B/E Aerospace Inc (NASDAQ:BEAV).
What does the smart money think about B/E Aerospace Inc (NASDAQ:BEAV)?
At Q2’s end, a total of 38 of the hedge funds we track held long positions in this stock, a change of 9% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably.
Consequently, certain money managers were leading the bulls’ herd. Lone Pine Capital, managed by Stephen Mandel, created the most outsized position in B/E Aerospace Inc (NASDAQ:BEAV). Lone Pine Capital had 271.9 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $216.9 million investment in the stock during the quarter. The following funds were also among the new BEAV investors: Dan Loeb’s Third Point, Ricky Sandler’s Eminence Capital, and David Stemerman’s Conatus Capital Management.
What do corporate executives and insiders think about B/E Aerospace Inc (NASDAQ:BEAV)?
Legal insider trading, particularly when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, B/E Aerospace Inc (NASDAQ:BEAV) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to B/E Aerospace Inc (NASDAQ:BEAV). These stocks are Triumph Group Inc (NYSE:TGI), Rockwell Collins, Inc. (NYSE:COL), TransDigm Group Incorporated (NYSE:TDG), L-3 Communications Holdings, Inc. (NYSE:LLL), and Embraer SA (ADR) (NYSE:ERJ). This group of stocks belong to the aerospace/defense products & services industry and their market caps resemble BEAV’s market cap.