This Metric Says You Are Smart to Buy Jarden Corp (JAH)

In the eyes of many investors, hedge funds are perceived as delayed, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey focuses on the upper echelon of this club, close to 525 funds. It is widely held that this group has its hands on the lion’s share of the smart money’s total capital, and by monitoring their best picks, we’ve unearthed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as key, optimistic insider trading sentiment is another way to look at the stock market universe. There are a variety of reasons for an executive to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).

Thus, let’s analyze the recent info about Jarden Corp (NYSE:JAH).

What have hedge funds been doing with Jarden Corp (NYSE:JAH)?

At the end of the second quarter, a total of 34 of the hedge funds we track held long positions in this stock, a change of 55% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably.

Jarden Corp (NYSE:JAH)Out of the hedge funds we follow, Murray Stahl’s Horizon Asset Management had the most valuable position in Jarden Corp (NYSE:JAH), worth close to $249.5 million, comprising 3.7% of its total 13F portfolio. Coming in second is Ken Fisher of Fisher Asset Management, with a $64.6 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, Crispin Odey’s Odey Asset Management Group and Daniel Lewis’s Orange Capital.

Now, particular hedge funds were breaking ground themselves. Horizon Asset Management, managed by Murray Stahl, assembled the most valuable position in Jarden Corp (NYSE:JAH). Horizon Asset Management had 249.5 million invested in the company at the end of the quarter. Ken Fisher’s Fisher Asset Management also made a $64.6 million investment in the stock during the quarter. The other funds with brand new JAH positions are Ken Griffin’s Citadel Investment Group, Crispin Odey’s Odey Asset Management Group, and Daniel Lewis’s Orange Capital.

What have insiders been doing with Jarden Corp (NYSE:JAH)?

Insider buying is most useful when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, Jarden Corp (NYSE:JAH) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Jarden Corp (NYSE:JAH). These stocks are Lifetime Brands Inc (NASDAQ:LCUT), Libbey Inc. (NYSEAMEX:LBY), Helen of Troy Limited (NASDAQ:HELE), The Clorox Company (NYSE:CLX), and Newell Rubbermaid Inc. (NYSE:NWL). This group of stocks are the members of the housewares & accessories industry and their market caps match JAH’s market cap.