Is Prestige Brands Holdings, Inc. (NYSE:PBH) a buy here? The smart money is getting more bullish. The number of long hedge fund positions moved up by 6 recently.
According to most investors, hedge funds are assumed to be worthless, old financial tools of years past. While there are greater than 8000 funds trading at present, we look at the crème de la crème of this club, around 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total capital, and by monitoring their top equity investments, we have brought to light a number of investment strategies that have historically outstripped the broader indices. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as key, positive insider trading sentiment is another way to parse down the stock market universe. There are a number of reasons for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a gander at the key action regarding Prestige Brands Holdings, Inc. (NYSE:PBH).
How have hedgies been trading Prestige Brands Holdings, Inc. (NYSE:PBH)?
At year’s end, a total of 15 of the hedge funds we track were bullish in this stock, a change of 67% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in Prestige Brands Holdings, Inc. (NYSE:PBH). Fisher Asset Management has a $29 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Private Capital Management, managed by Gregg J. Powers, which held a $21 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Some other peers that are bullish include John Paulson’s Paulson & Co, Wallace Weitz’s Wallace R. Weitz & Co. and Cliff Asness’s AQR Capital Management.
Now, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Prestige Brands Holdings, Inc. (NYSE:PBH). Citadel Investment Group had 5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $2 million investment in the stock during the quarter. The following funds were also among the new PBH investors: Israel Englander’s Millennium Management, Jeffrey Vinik’s Vinik Asset Management, and Ken Heebner’s Capital Growth Management.
What have insiders been doing with Prestige Brands Holdings, Inc. (NYSE:PBH)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time frame, Prestige Brands Holdings, Inc. (NYSE:PBH) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the returns exhibited by our studies, everyday investors should always monitor hedge fund and insider trading activity, and Prestige Brands Holdings, Inc. (NYSE:PBH) 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.