Is Intrepid Potash, Inc. (NYSE:IPI) going to take off soon? The smart money is becoming more confident. The number of long hedge fund bets rose by 9 lately.
According to most stock holders, hedge funds are viewed as slow, old financial tools of years past. While there are more than 8000 funds with their doors open at present, we hone in on the leaders of this group, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by monitoring their best investments, we have figured out a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, optimistic insider trading activity is another way to break down the marketplace. There are a variety of reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if piggybackers know where to look (learn more here).
With these “truths” under our belt, we’re going to take a gander at the key action regarding Intrepid Potash, Inc. (NYSE:IPI).
What have hedge funds been doing with Intrepid Potash, Inc. (NYSE:IPI)?
At Q1’s end, a total of 15 of the hedge funds we track were bullish in this stock, a change of 150% from the first quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Intrepid Potash, Inc. (NYSE:IPI), worth close to $57.9 million, comprising 0.2% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $20.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Steven Cohen’s SAC Capital Advisors, Richard Chilton’s Chilton Investment Company and Cliff Asness’s AQR Capital Management.
Now, key hedge funds were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, assembled the most valuable position in Intrepid Potash, Inc. (NYSE:IPI). SAC Capital Advisors had 17.5 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $2.7 million position during the quarter. The other funds with brand new IPI positions are John Fichthorn’s Dialectic Capital Management, Louis Bacon’s Moore Global Investments, and Philippe Jabre’s Jabre Capital Partners.
How are insiders trading Intrepid Potash, Inc. (NYSE:IPI)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past 180 days. Over the latest six-month time frame, Intrepid Potash, Inc. (NYSE:IPI) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Intrepid Potash, Inc. (NYSE:IPI). These stocks are Terra Nitrogen Company, L.P. (NYSE:TNH), Scotts Miracle-Gro Co (NYSE:SMG), American Vanguard Corp. (NYSE:AVD), CVR Partners LP (NYSE:UAN), and Rentech Nitrogen Partners LP (NYSE:RNF). This group of stocks are in the agricultural chemicals industry and their market caps match IPI’s market cap.