This Metric Says You Are Smart to Buy Consolidated Graphics, Inc. (CGX)

Consolidated Graphics, Inc. (NYSE:CGX) has experienced an increase in enthusiasm from smart money in recent months.

At the moment, there are dozens of metrics investors can use to track their holdings. A duo of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can trounce the market by a significant margin (see just how much).

Consolidated Graphics, Inc. (NYSE:CGX)

Just as key, positive insider trading sentiment is another way to break down the stock market universe. As the old adage goes: there are plenty of reasons for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this method if you understand where to look (learn more here).

Consequently, it’s important to take a gander at the latest action regarding Consolidated Graphics, Inc. (NYSE:CGX).

What does the smart money think about Consolidated Graphics, Inc. (NYSE:CGX)?

Heading into 2013, a total of 9 of the hedge funds we track were bullish in this stock, a change of 29% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, holds the largest position in Consolidated Graphics, Inc. (NYSE:CGX). Algert Coldiron Investors has a $2.6 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.

Consequently, specific money managers were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, created the most valuable position in Consolidated Graphics, Inc. (NYSE:CGX). Gotham Asset Management had 1.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital and Charles Davidson’s Wexford Capital.

How have insiders been trading Consolidated Graphics, Inc. (NYSE:CGX)?

Insider buying is at its handiest when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, Consolidated Graphics, Inc. (NYSE:CGX) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Consolidated Graphics, Inc. (NYSE:CGX). These stocks are Safeguard Scientifics, Inc (NYSE:SFE), Net 1 UEPS Technologies Inc (NASDAQ:UEPS), Multi-Color Corporation (NASDAQ:LABL), Higher One Holdings, Inc (NYSE:ONE), and Furiex Pharmaceuticals Inc (NASDAQ:FURX). This group of stocks belong to the business services industry and their market caps resemble CGX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Safeguard Scientifics, Inc (NYSE:SFE) 6 2 0
Net 1 UEPS Technologies Inc (NASDAQ:UEPS) 11 0 0
Multi-Color Corporation (NASDAQ:LABL) 1 0 0
Higher One Holdings, Inc (NYSE:ONE) 8 0 3
Furiex Pharmaceuticals Inc (NASDAQ:FURX) 4 0 2

With the returns shown by Insider Monkey’s research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Consolidated Graphics, Inc. (NYSE:CGX) is an important part of this process.

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