Is Gamco Investors Inc. (NYSE:GBL) a bargain? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets moved up by 4 lately.
To most market participants, hedge funds are seen as worthless, old financial vehicles of years past. While there are more than 8000 funds with their doors open at present, we look at the aristocrats of this group, around 450 funds. Most estimates calculate that this group oversees most of the smart money’s total capital, and by keeping an eye on their highest performing picks, we have deciphered a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading sentiment is a second way to break down the stock market universe. As the old adage goes: there are a number of incentives for an insider to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).
Now, it’s important to take a gander at the key action regarding Gamco Investors Inc. (NYSE:GBL).
How are hedge funds trading Gamco Investors Inc. (NYSE:GBL)?
Heading into 2013, a total of 6 of the hedge funds we track held long positions in this stock, a change of 200% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Gamco Investors Inc. (NYSE:GBL), worth close to $25 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by MFP Investors, managed by Michael Price, which held a $3.8 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most outsized position in Gamco Investors Inc. (NYSE:GBL). Millennium Management had 0.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.4 million investment in the stock during the quarter. The other funds with brand new GBL positions are John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.
How are insiders trading Gamco Investors Inc. (NYSE:GBL)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Gamco Investors Inc. (NYSE:GBL) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Gamco Investors Inc. (NYSE:GBL). These stocks are Financial Engines Inc (NASDAQ:FNGN), Cohen & Steers, Inc. (NYSE:CNS), Virtus Investment Partners Inc (NASDAQ:VRTS), Evercore Partners Inc. (NYSE:EVR), and WisdomTree Investments, Inc. (NASDAQ:WETF). This group of stocks belong to the asset management industry and their market caps are similar to GBL’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Financial Engines Inc (NASDAQ:FNGN)||5||0||12|
|Cohen & Steers, Inc. (NYSE:CNS)||5||0||2|
|Virtus Investment Partners Inc (NASDAQ:VRTS)||7||0||5|
|Evercore Partners Inc. (NYSE:EVR)||8||0||5|
|WisdomTree Investments, Inc. (NASDAQ:WETF)||9||0||10|
With the results exhibited by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Gamco Investors Inc. (NYSE:GBL) applies perfectly to this mantra.