Is Arctic Cat Inc (NASDAQ:ACAT) an excellent stock to buy now? The best stock pickers are turning bullish. The number of bullish hedge fund bets moved up by 1 recently.
In today’s marketplace, there are many metrics market participants can use to monitor their holdings. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can beat the broader indices by a healthy amount (see just how much).
Just as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are many incentives for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action regarding Arctic Cat Inc (NASDAQ:ACAT).
What does the smart money think about Arctic Cat Inc (NASDAQ:ACAT)?
At the end of the fourth quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of 8% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Robert Joseph Caruso’s Select Equity Group had the most valuable position in Arctic Cat Inc (NASDAQ:ACAT), worth close to $25 million, accounting for 0.4% of its total 13F portfolio. On Select Equity Group’s heels is AQR Capital Management, managed by Cliff Asness, which held a $8 million position; the fund has 0% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Boaz Weinstein’s Saba Capital, Chuck Royce’s Royce & Associates and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Saba Capital, managed by Boaz Weinstein, established the largest position in Arctic Cat Inc (NASDAQ:ACAT). Saba Capital had 6 million invested in the company at the end of the quarter. John Fichthorn’s Dialectic Capital Management also initiated a $2 million position during the quarter. The following funds were also among the new ACAT investors: John Fichthorn’s Dialectic Capital Management and Neil Chriss’s Hutchin Hill Capital.
What do corporate executives and insiders think about Arctic Cat Inc (NASDAQ:ACAT)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Arctic Cat Inc (NASDAQ:ACAT) has seen 2 unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Arctic Cat Inc (NASDAQ:ACAT). These stocks are Winnebago Industries, Inc. (NYSE:WGO), Federal Signal Corporation (NYSE:FSS), Drew Industries, Inc. (NYSE:DW), Thor Industries, Inc. (NYSE:THO), and Polaris Industries Inc. (NYSE:PII). This group of stocks belong to the recreational vehicles industry and their market caps resemble ACAT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Winnebago Industries, Inc. (NYSE:WGO)||12||2||0|
|Federal Signal Corporation (NYSE:FSS)||9||1||0|
|Drew Industries, Inc. (NYSE:DW)||10||0||9|
|Thor Industries, Inc. (NYSE:THO)||15||1||1|
|Polaris Industries Inc. (NYSE:PII)||26||0||11|
With the results exhibited by the aforementioned research, retail investors must always pay attention to hedge fund and insider trading sentiment, and Arctic Cat Inc (NASDAQ:ACAT) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.