Post Holdings Inc (NYSE:POST) investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months.
If you’d ask most shareholders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the bigwigs of this group, around 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by paying attention to their highest performing equity investments, we have determined a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a number of reasons for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).
Consequently, it’s important to take a peek at the latest action surrounding Post Holdings Inc (NYSE:POST).
What does the smart money think about Post Holdings Inc (NYSE:POST)?
In preparation for this year, a total of 17 of the hedge funds we track were bullish in this stock, a change of -29% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially.
Of the funds we track, Paulson & Co, managed by John Paulson, holds the largest position in Post Holdings Inc (NYSE:POST). Paulson & Co has a $42 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Jonathon Jacobson of Highfields Capital Management, with a $41 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Mario Gabelli’s GAMCO Investors and Larry Foley and Paul Farrell’s Bronson Point Partners.
Judging by the fact that Post Holdings Inc (NYSE:POST) has faced falling interest from hedge fund managers, we can see that there lies a certain “tier” of fund managers who were dropping their positions entirely heading into 2013. Interestingly, John A. Levin’s Levin Capital Strategies sold off the largest position of the 450+ funds we watch, valued at close to $11 million in stock.. Howard Guberman’s fund, Gruss Asset Management, also dropped its stock, about $9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 7 funds heading into 2013.
How have insiders been trading Post Holdings Inc (NYSE:POST)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time period, Post Holdings Inc (NYSE:POST) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned studies, everyday investors should always watch hedge fund and insider trading sentiment, and Post Holdings Inc (NYSE:POST) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.