Now, according to many of your peers, hedge funds are seen as overrated, outdated investment tools of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey aim at the aristocrats of this group, about 525 funds. It is assumed that this group controls the lion’s share of the hedge fund industry’s total capital, and by paying attention to their highest quality investments, we’ve figured out a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as crucial, positive insider trading sentiment is another way to analyze the investments you’re interested in. Just as you’d expect, there are a number of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).
Furthermore, we’re going to examine the recent info surrounding Sonic Automotive Inc (NYSE:SAH).
What have hedge funds been doing with Sonic Automotive Inc (NYSE:SAH)?
Heading into Q3, a total of 16 of the hedge funds we track were bullish in this stock, a change of 33% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.
Out of the hedge funds we follow, Ricky Sandler’s Eminence Capital had the biggest position in Sonic Automotive Inc (NYSE:SAH), worth close to $42.4 million, accounting for 1% of its total 13F portfolio. Coming in second is Hawkeye Capital, managed by Richard Rubin, which held a $16.6 million position; 5.2% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Consequently, specific money managers were breaking ground themselves. Eminence Capital, managed by Ricky Sandler, established the most outsized position in Sonic Automotive Inc (NYSE:SAH). Eminence Capital had 42.4 million invested in the company at the end of the quarter. Richard Rubin’s Hawkeye Capital also made a $16.6 million investment in the stock during the quarter. The following funds were also among the new SAH investors: Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.
What do corporate executives and insiders think about Sonic Automotive Inc (NYSE:SAH)?
Insider buying is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Sonic Automotive Inc (NYSE:SAH) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Sonic Automotive Inc (NYSE:SAH). These stocks are Penske Automotive Group, Inc. (NYSE:PAG), KAR Auction Services Inc (NYSE:KAR), Asbury Automotive Group, Inc. (NYSE:ABG), Lithia Motors Inc (NYSE:LAD), and Group 1 Automotive, Inc. (NYSE:GPI). All of these stocks are in the auto dealerships industry and their market caps match SAH’s market cap.