Is Spectrum Brands Holdings, Inc. (NYSE:SPB) a bargain? The smart money is turning bullish. The number of long hedge fund bets advanced by 2 lately.
According to most shareholders, hedge funds are viewed as worthless, outdated financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the moguls of this group, around 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by paying attention to their highest performing stock picks, we have discovered a number of investment strategies that have historically outstripped the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, positive insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are a variety of stimuli for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).
Now, we’re going to take a look at the key action surrounding Spectrum Brands Holdings, Inc. (NYSE:SPB).
Hedge fund activity in Spectrum Brands Holdings, Inc. (NYSE:SPB)
At Q1’s end, a total of 21 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Harbinger, managed by Phil Falcone, holds the most valuable position in Spectrum Brands Holdings, Inc. (NYSE:SPB). Harbinger has a $1.6917 billion position in the stock, comprising 66.4% of its 13F portfolio. On Harbinger’s heels is Christian Leone of Luxor Capital Group, with a $94 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Daniel Lewis’s Orange Capital, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.
As aggregate interest increased, key money managers were leading the bulls’ herd. Orange Capital, managed by Daniel Lewis, created the most outsized position in Spectrum Brands Holdings, Inc. (NYSE:SPB). Orange Capital had 33.6 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $16.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Malcolm Fairbairn’s Ascend Capital, Alok Agrawal’s Bloom Tree Partners, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading Spectrum Brands Holdings, Inc. (NYSE:SPB)?
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, Spectrum Brands Holdings, Inc. (NYSE:SPB) has experienced 3 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Spectrum Brands Holdings, Inc. (NYSE:SPB). These stocks are Universal Electronics Inc (NASDAQ:UEIC), Panasonic Corporation (ADR) (NYSE:PC), Sony Corporation (ADR) (NYSE:SNE), Fabrinet (NYSE:FN), and Harman International Industries Inc./DE/ (NYSE:HAR). This group of stocks are in the electronic equipment industry and their market caps are closest to SPB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Universal Electronics Inc (NASDAQ:UEIC)||5||0||5|
|Panasonic Corporation (ADR) (NYSE:PC)||9||0||0|
|Sony Corporation (ADR) (NYSE:SNE)||14||0||0|
|Harman International Industries Inc./DE/ (NYSE:HAR)||22||0||1|
With the results shown by the aforementioned studies, retail investors should always monitor hedge fund and insider trading activity, and Spectrum Brands Holdings, Inc. (NYSE:SPB) is no exception.