Is Exelis Inc (NYSE:XLS) a buy right now? Investors who are in the know are in an optimistic mood. The number of bullish hedge fund positions advanced by 1 in recent months.
To most shareholders, hedge funds are viewed as underperforming, old financial tools of the past. While there are more than 8000 funds trading today, we hone in on the crème de la crème of this club, about 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by monitoring their best picks, we have uncovered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are many motivations for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).
Consequently, it’s important to take a glance at the latest action encompassing Exelis Inc (NYSE:XLS).
What have hedge funds been doing with Exelis Inc (NYSE:XLS)?
At year’s end, a total of 21 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Levin Capital Strategies, managed by John A. Levin, holds the most valuable position in Exelis Inc (NYSE:XLS). Levin Capital Strategies has a $54 million position in the stock, comprising 1.1% of its 13F portfolio. On Levin Capital Strategies’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $25 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Mario Gabelli’s GAMCO Investors, D. E. Shaw’s D E Shaw and Clint Carlson’s Carlson Capital.
As aggregate interest increased, key hedge funds were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, created the biggest position in Exelis Inc (NYSE:XLS). Highbridge Capital Management had 4 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How are insiders trading Exelis Inc (NYSE:XLS)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time period, Exelis Inc (NYSE:XLS) has seen 2 unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey’s strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Exelis Inc (NYSE:XLS) is an important part of this process.
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.