Raytheon Company (NYSE:RTN) was in 24 hedge funds’ portfolio at the end of the fourth quarter of 2012. RTN investors should be aware of an increase in enthusiasm from smart money in recent months. There were 23 hedge funds in our database with RTN positions at the end of the previous quarter.
To most stock holders, hedge funds are assumed to be unimportant, old financial tools of years past. While there are over 8000 funds trading today, we at Insider Monkey look at the leaders of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by paying attention to their highest performing stock picks, we have unearthed a number of investment strategies that have historically beaten the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as important, bullish insider trading sentiment is a second way to break down the stock market universe. Obviously, there are many motivations for an executive to cut shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
Now, it’s important to take a look at the latest action surrounding Raytheon Company (NYSE:RTN).
Hedge fund activity in Raytheon Company (NYSE:RTN)
In preparation for this year, a total of 24 of the hedge funds we track were bullish in this stock, a change of 4% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the biggest position in Raytheon Company (NYSE:RTN), worth close to $240 million, comprising 0.9% of its total 13F portfolio. On Adage Capital Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $72 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include David Harding’s Winton Capital Management, Joel Greenblatt’s Gotham Asset Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, key money managers have been driving this bullishness. D E Shaw, managed by D. E. Shaw, established the biggest position in Raytheon Company (NYSE:RTN). D E Shaw had 14 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $6 million position during the quarter. The following funds were also among the new RTN investors: Neil Chriss’s Hutchin Hill Capital, Ray Dalio’s Bridgewater Associates, and Mike Vranos’s Ellington.
How are insiders trading Raytheon Company (NYSE:RTN)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time frame, Raytheon Company (NYSE:RTN) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
With the results shown by the aforementioned research, retail investors should always watch hedge fund and insider trading activity, and Raytheon Company (NYSE:RTN) applies perfectly to this mantra.
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