CIT Group Inc. (NYSE:CIT) was in 46 hedge funds’ portfolio at the end of the first quarter of 2013. CIT has seen an increase in enthusiasm from smart money recently. There were 44 hedge funds in our database with CIT positions at the end of the previous quarter.
In the eyes of most market participants, hedge funds are assumed to be slow, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the aristocrats of this club, close to 450 funds. Most estimates calculate that this group controls most of the smart money’s total capital, and by monitoring their top equity investments, we have formulated a few investment strategies that have historically outstripped 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, bullish insider trading sentiment is a second way to break down the financial markets. There are lots of incentives for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the latest action encompassing CIT Group Inc. (NYSE:CIT).
Hedge fund activity in CIT Group Inc. (NYSE:CIT)
At Q1’s end, a total of 46 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Mark T. Gallogly’s Centerbridge Partners had the most valuable position in CIT Group Inc. (NYSE:CIT), worth close to $384.7 million, accounting for 44.5% of its total 13F portfolio. Sitting at the No. 2 spot is D E Shaw, managed by D. E. Shaw, which held a $147.6 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include John A. Levin’s Levin Capital Strategies, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Frank Brosens’s Taconic Capital.
Now, some big names have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the most outsized position in CIT Group Inc. (NYSE:CIT). First Pacific Advisors LLC had 132.1 million invested in the company at the end of the quarter. Jeffrey Tannenbaum’s Fir Tree also made a $56.7 million investment in the stock during the quarter. The other funds with brand new CIT positions are Eric Chen’s Antipodean Advisors, Louis Bacon’s Moore Global Investments, and Stanley Shopkorn and Douglas Day’s Hilltop Park Associates.
Insider trading activity in CIT Group Inc. (NYSE:CIT)
Insider buying is best served when the company in focus has seen transactions within the past six months. Over the last 180-day time period, CIT Group Inc. (NYSE:CIT) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to CIT Group Inc. (NYSE:CIT). These stocks are Discover Financial Services (NYSE:DFS), Equifax Inc. (NYSE:EFX), SLM Corp (NASDAQ:SLM), and The Western Union Company (NYSE:WU). All of these stocks are in the credit services industry and their market caps resemble CIT’s market cap.