To the average investor, there are dozens of metrics shareholders can use to watch stocks. A couple of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outclass their index-focused peers by a healthy amount (see just how much).
Just as necessary, optimistic insider trading activity is another way to look at the stock market universe. Just as you’d expect, there are a number of reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
Now that that’s out of the way, we’re going to examine the recent info surrounding Engility Holdings Inc (NYSE:EGL).
Hedge fund activity in Engility Holdings Inc (NYSE:EGL)
In preparation for the third quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly.
According to our 13F database, David Abrams’s Abrams Capital Management had the largest position in Engility Holdings Inc (NYSE:EGL), worth close to $75.8 million, comprising 4.4% of its total 13F portfolio. The second largest stake is held by Deccan Value Advisors, managed by Vinit Bodas, which held a $37.4 million position; 13.2% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Richard S. Pzena’s Pzena Investment Management, Michael Doheny’s Freshford Capital Management and Raymond J. Harbert’s Harbert Management.
Due to the fact Engility Holdings Inc (NYSE:EGL) has faced bearish sentiment from upper-tier hedge fund managers, logic holds that there lies a certain “tier” of hedgies that slashed their entire stakes in Q1. At the top of the heap, Robert Jaffe’s Force Capital dumped the largest investment of all the hedgies we track, worth about $3 million in stock. Israel Englander’s fund, Millennium Management, also cut its stock, about $1.4 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds in Q1.
Insider trading activity in Engility Holdings Inc (NYSE:EGL)
Legal insider trading, particularly when it’s bullish, is best served when the company in question has seen transactions within the past half-year. Over the latest half-year time period, Engility Holdings Inc (NYSE:EGL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Using the returns explained by the previously mentioned strategies, regular investors must always track hedge fund and insider trading sentiment, and Engility Holdings Inc (NYSE:EGL) applies perfectly to this mantra.