FBR & Co (NASDAQ:FBRC) has experienced a decrease in activity from the world’s largest hedge funds lately.
To most investors, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the crème de la crème of this group, around 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their highest performing picks, we have identified a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 trumped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, positive insider trading activity is a second way to parse down the stock market universe. There are a variety of incentives for an insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).
Now, it’s important to take a glance at the recent action encompassing FBR & Co (NASDAQ:FBRC).
How are hedge funds trading FBR & Co (NASDAQ:FBRC)?
At year’s end, a total of 6 of the hedge funds we track were long in this stock, a change of 0% from the third quarter; in our experience, this is a bearish indicator. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in FBR & Co (NASDAQ:FBRC). Royce & Associates has a $9.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Michael Lowenstein of Kensico Capital, with a $7.3 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.
How have insiders been trading FBR & Co (NASDAQ:FBRC)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, FBR & Co (NASDAQ:FBRC) has experienced zero unique insiders purchasing, and zero 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 FBR & Co (NASDAQ:FBRC). These stocks are Resource America Inc (NASDAQ:REXI), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Calamos Asset Management, Inc (NASDAQ:CLMS), Solar Senior Capital Ltd (NASDAQ:SUNS), and Manning and Napier Inc (NYSE:MN). This group of stocks belong to the asset management industry and their market caps are closest to FBRC’s market cap.