Is Beacon Roofing Supply, Inc. (NASDAQ:BECN) a sound stock to buy now? Hedge funds are in an optimistic mood. The number of long hedge fund bets rose by 4 recently.
In the eyes of most shareholders, hedge funds are assumed to be worthless, old investment tools of the past. While there are over 8000 funds with their doors open today, we hone in on the elite of this club, close to 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by paying attention to their highest performing investments, we have determined a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as important, bullish insider trading activity is another way to parse down the marketplace. Obviously, there are lots of stimuli for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if shareholders understand what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the latest action encompassing Beacon Roofing Supply, Inc. (NASDAQ:BECN).
How are hedge funds trading Beacon Roofing Supply, Inc. (NASDAQ:BECN)?
At the end of the fourth quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of 31% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in Beacon Roofing Supply, Inc. (NASDAQ:BECN). Adage Capital Management has a $43 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Mariko Gordon of Daruma Asset Management, with a $42 million position; 2.5% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include James A. Noonan’s Pivot Point Capital, Matthew Lindenbaum’s Basswood Capital and Van Schreiber’s Bennett Lawrence Management.
Consequently, some big names were leading the bulls’ herd. Daruma Asset Management, managed by Mariko Gordon, established the biggest position in Beacon Roofing Supply, Inc. (NASDAQ:BECN). Daruma Asset Management had 42 million invested in the company at the end of the quarter. Ken Fisher’s Fisher Asset Management also made a $8 million investment in the stock during the quarter. The other funds with brand new BECN positions are Israel Englander’s Millennium Management, John Bader’s Halcyon Asset Management, and Mike Vranos’s Ellington.
What do corporate executives and insiders think about Beacon Roofing Supply, Inc. (NASDAQ:BECN)?
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time period, Beacon Roofing Supply, Inc. (NASDAQ:BECN) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the results shown by our tactics, everyday investors must always monitor hedge fund and insider trading sentiment, and Beacon Roofing Supply, Inc. (NASDAQ:BECN) 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.