HollyFrontier Corp (NYSE:HFC) shareholders have witnessed an increase in hedge fund interest lately.
If you’d ask most stock holders, hedge funds are assumed to be worthless, old investment 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 club, around 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their highest performing stock picks, we have identified a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, bullish insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are a number of stimuli for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
With all of this in mind, we’re going to take a glance at the key action surrounding HollyFrontier Corp (NYSE:HFC).
How are hedge funds trading HollyFrontier Corp (NYSE:HFC)?
In preparation for this year, a total of 35 of the hedge funds we track were long in this stock, a change of 6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Point State Capital, managed by Sean Cullinan, holds the most valuable position in HollyFrontier Corp (NYSE:HFC). Point State Capital has a $101 million position in the stock, comprising 1.5% of its 13F portfolio. On Point State Capital’s heels is Jim Simons of Renaissance Technologies, with a $81 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include John Burbank’s Passport Capital, Ric Dillon’s Diamond Hill Capital and Jeffrey Vinik’s Vinik Asset Management.
Consequently, key money managers were leading the bulls’ herd. Diamond Hill Capital, managed by Ric Dillon, assembled the largest position in HollyFrontier Corp (NYSE:HFC). Diamond Hill Capital had 49 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $8 million position during the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital, Andrew Sandler’s Sandler Capital Management, and Glenn Russell Dubin’s Highbridge Capital Management.
How have insiders been trading HollyFrontier Corp (NYSE:HFC)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, HollyFrontier Corp (NYSE:HFC) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey’s tactics, everyday investors must always watch hedge fund and insider trading sentiment, and HollyFrontier Corp (NYSE:HFC) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.