Is WESCO International, Inc. (NYSE:WCC) a buy right now? Prominent investors are turning bullish. The number of bullish hedge fund bets increased by 3 lately.
If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation at present, we choose to focus on the upper echelon of this club, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by tracking their best equity investments, we have spotted a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 (see all of our picks from August).
Just as important, bullish insider trading activity is another way to break down the world of equities. There are lots of motivations for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).
With all of this in mind, we’re going to take a glance at the recent action surrounding WESCO International, Inc. (NYSE:WCC).
Hedge fund activity in WESCO International, Inc. (NYSE:WCC)
In preparation for this year, a total of 22 of the hedge funds we track were long in this stock, a change of 16% 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 stakes considerably.
Of the funds we track, Pennant Capital Management, managed by Alan Fournier, holds the most valuable position in WESCO International, Inc. (NYSE:WCC). Pennant Capital Management has a $150 million position in the stock, comprising 3.1% of its 13F portfolio. Sitting at the No. 2 spot is Dan Loeb of Third Point, with a $91 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Israel Englander’s Millennium Management, Matthew Lindenbaum’s Basswood Capital and Alexander Mitchell’s Scopus Asset Management.
As one would reasonably expect, specific money managers have jumped into WESCO International, Inc. (NYSE:WCC) headfirst. Magnetar Capital, managed by Alec Litowitz and Ross Laser, created the most outsized position in WESCO International, Inc. (NYSE:WCC). Magnetar Capital had 15 million invested in the company at the end of the quarter. Anil Stevens and Glenn Shapiro’s Parameter Capital Management also initiated a $4 million position during the quarter. The other funds with brand new WCC positions are Dmitry Balyasny’s Balyasny Asset Management, Glenn J. Krevlin’s Glenhill Advisors, and SAC Subsidiary’s CR Intrinsic Investors.
What do corporate executives and insiders think about WESCO International, Inc. (NYSE:WCC)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, WESCO International, Inc. (NYSE:WCC) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
With the returns shown by our tactics, everyday investors must always monitor hedge fund and insider trading activity, and WESCO International, Inc. (NYSE:WCC) is an important part of this process.
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.