We can judge whether Winnebago Industries, Inc. (NYSE:WGO) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to view the new hedge fund action encompassing Winnebago Industries, Inc. (NYSE:WGO).
How are hedge funds trading Winnebago Industries, Inc. (NYSE:WGO)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in WGO heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in Winnebago Industries, Inc. (NYSE:WGO), which was worth $28.2 million at the end of the third quarter. On the second spot was Tontine Asset Management which amassed $16.9 million worth of shares. Moreover, Marshall Wace LLP, Millennium Management, and Scopus Asset Management were also bullish on Winnebago Industries, Inc. (NYSE:WGO), allocating a large percentage of their portfolios to this stock.
Now, key money managers have jumped into Winnebago Industries, Inc. (NYSE:WGO) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most outsized position in Winnebago Industries, Inc. (NYSE:WGO). Marshall Wace LLP had $7.9 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $4.8 million investment in the stock during the quarter. The other funds with brand new WGO positions are Jim Simons’s Renaissance Technologies, Stephen C. Freidheim’s Cyrus Capital Partners, and D. E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks similar to Winnebago Industries, Inc. (NYSE:WGO). We will take a look at World Acceptance Corp. (NASDAQ:WRLD), Aberdeen Asia-Pacific Income Fund Inc (NYSE:FAX), Career Education Corp. (NASDAQ:CECO), and Eagle Pharmaceuticals Inc (NASDAQ:EGRX). This group of stocks’ market caps are closest to WGO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $76 million in WGO’s case. Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is the most popular stock in this table. On the other hand Aberdeen Asia-Pacific Income Fund Inc (NYSE:FAX) is the least popular one with only 2 bullish hedge fund positions. Winnebago Industries, Inc. (NYSE:WGO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EGRX might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.