Is Pinnacle Entertainment, Inc (NYSE:PNK) Going to Burn These Hedge Funds?

Is Pinnacle Entertainment, Inc (NYSE:PNK) a sound investment today? Prominent investors are in an optimistic mood. The number of long hedge fund positions increased by 3 in recent months.

Pinnacle Entertainment, Inc (NYSE:PNK)

In today’s marketplace, there are a multitude of indicators market participants can use to track their holdings. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outclass the broader indices by a healthy amount (see just how much).

Equally as beneficial, positive insider trading sentiment is a second way to parse down the marketplace. Just as you’d expect, there are a variety of reasons 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. Various academic studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action regarding Pinnacle Entertainment, Inc (NYSE:PNK).

Hedge fund activity in Pinnacle Entertainment, Inc (NYSE:PNK)

At the end of the fourth quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 23% from the third quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Daruma Asset Management, managed by Mariko Gordon, holds the biggest position in Pinnacle Entertainment, Inc (NYSE:PNK). Daruma Asset Management has a $41 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Eliav Assouline and Marc Andersen of Axial Capital, with a $19 million position; 2.4% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Abby Flamholz and Yehuda Blinder’s ADAR Investment Management, Ken Griffin’s Citadel Investment Group and Mario Gabelli’s GAMCO Investors.

As aggregate interest increased, key hedge funds were breaking ground themselves. Axial Capital, managed by Eliav Assouline and Marc Andersen, established the largest position in Pinnacle Entertainment, Inc (NYSE:PNK). Axial Capital had 19 million invested in the company at the end of the quarter. John Paulson’s Paulson & Co also made a $2 million investment in the stock during the quarter. The other funds with brand new PNK positions are Ward Davis and Brian Agnew’s Caerus Global Investors, Dmitry Balyasny’s Balyasny Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

What do corporate executives and insiders think about Pinnacle Entertainment, Inc (NYSE:PNK)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Pinnacle Entertainment, Inc (NYSE:PNK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns shown by the aforementioned time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Pinnacle Entertainment, Inc (NYSE:PNK) applies perfectly to this mantra.

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