To many of your fellow readers, hedge funds are assumed to be delayed, outdated investment vehicles of a forgotten age. Although there are over 8,000 hedge funds with their doors open today, Insider Monkey aim at the moguls of this group, close to 525 funds. It is widely held that this group oversees the majority of the smart money’s total capital, and by paying attention to their highest quality picks, we’ve figured out a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as key, optimistic insider trading sentiment is a second way to analyze the financial markets. Obviously, there are a variety of incentives for an insider to sell shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Keeping this in mind, it’s important to discuss the recent info about Kaman Corporation (NYSE:KAMN).
How are hedge funds trading Kaman Corporation (NYSE:KAMN)?
Heading into Q3, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds we follow, Mario Gabelli’s GAMCO Investors had the largest position in Kaman Corporation (NYSE:KAMN), worth close to $104.1 million, comprising 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Amy Minella of Cardinal Capital, with a $29.7 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Chuck Royce’s Royce & Associates, John A. Levin’s Levin Capital Strategies and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Kaman Corporation (NYSE:KAMN) has experienced bearish sentiment from upper-tier hedge fund managers, it’s safe to say that there is a sect of hedgies that slashed their positions entirely at the end of the second quarter. At the top of the heap, Jim Simons’s Renaissance Technologies dumped the biggest stake of the “upper crust” of funds we watch, valued at about $2.1 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Kaman Corporation (NYSE:KAMN)?
Insider buying is particularly usable when the company in focus has experienced transactions within the past six months. Over the last six-month time frame, Kaman Corporation (NYSE:KAMN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Kaman Corporation (NYSE:KAMN). These stocks are Elbit Systems Ltd. (USA) (NASDAQ:ESLT), Smith & Wesson Holding Corporation (NASDAQ:SWHC), AAR Corp. (NYSE:AIR), Orbital Sciences Corp (NYSE:ORB), and Sturm, Ruger & Company (NYSE:RGR). All of these stocks are in the aerospace/defense products & services industry and their market caps are similar to KAMN’s market cap.