Is Arrow Electronics, Inc. (NYSE:ARW) an attractive stock to buy now? Investors who are in the know are taking a bearish view. The number of bullish hedge fund bets shrunk by 3 lately.
If you’d ask most market participants, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, we hone in on the top tier of this club, about 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their top investments, we have determined a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, positive insider trading sentiment is another way to break down the marketplace. There are a variety of incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).
Consequently, we’re going to take a gander at the recent action regarding Arrow Electronics, Inc. (NYSE:ARW).
Hedge fund activity in Arrow Electronics, Inc. (NYSE:ARW)
Heading into Q2, a total of 17 of the hedge funds we track held long positions in this stock, a change of -15% from the first quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.
Of the funds we track, First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, holds the most valuable position in Arrow Electronics, Inc. (NYSE:ARW). First Pacific Advisors LLC has a $174.7 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $32.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Dmitry Balyasny’s Balyasny Asset Management.
Due to the fact that Arrow Electronics, Inc. (NYSE:ARW) has witnessed falling interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers who sold off their positions entirely in Q1. Interestingly, Gilchrist Berg’s Water Street Capital cut the biggest stake of the 450+ funds we track, worth about $26 million in stock.. SAC Subsidiary’s fund, Sigma Capital Management, also sold off its call options., about $11.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds in Q1.
Insider trading activity in Arrow Electronics, Inc. (NYSE:ARW)
Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time frame, Arrow Electronics, Inc. (NYSE:ARW) has seen zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Arrow Electronics, Inc. (NYSE:ARW). These stocks are VOXX International Corp (NASDAQ:VOXX), Anixter International Inc. (NYSE:AXE), Watsco Inc (NYSE:WSO), and Avnet, Inc. (NYSE:AVT). This group of stocks belong to the electronics wholesale industry and their market caps resemble ARW’s market cap.