Hedge Funds Are Buying Alaska Air Group, Inc. (NYSE:ALK)

Alaska Air Group, Inc. (NYSE:ALK) was in 18 hedge funds’ portfolio at the end of the fourth quarter of 2012. ALK shareholders have witnessed an increase in enthusiasm from smart money lately. There were 16 hedge funds in our database with ALK positions at the end of the previous quarter.

Alaska Air Group, Inc. (NYSE:ALK)

To the average investor, there are plenty of gauges shareholders can use to monitor the equity markets. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can beat their index-focused peers by a healthy amount (see just how much).

Just as important, bullish insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of motivations for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).

Consequently, let’s take a look at the recent action encompassing Alaska Air Group, Inc. (NYSE:ALK).

Hedge fund activity in Alaska Air Group, Inc. (NYSE:ALK)

At the end of the fourth quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of 13% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Alaska Air Group, Inc. (NYSE:ALK). Renaissance Technologies has a $182 million position in the stock, comprising 0.5% of its 13F portfolio. On Renaissance Technologies’s heels is PAR Capital Management, managed by Paul ReederáandáEdward Shapiro, which held a $179 million position; the fund has 7.8% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Robert Bishop’s Impala Asset Management, Cliff Asness’s AQR Capital Management and Ric Dillon’s Diamond Hill Capital.

As aggregate interest increased, key money managers were breaking ground themselves. Ivory Capital (Investment Mgmt), managed by Curtis Macnguyen, initiated the most valuable position in Alaska Air Group, Inc. (NYSE:ALK). Ivory Capital (Investment Mgmt) had 3 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $1 million position during the quarter.

How are insiders trading Alaska Air Group, Inc. (NYSE:ALK)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Alaska Air Group, Inc. (NYSE:ALK) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

With the returns demonstrated by our studies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Alaska Air Group, Inc. (NYSE:ALK) is an important part of this process.

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