This Metric Says You Are Smart to Sell Jabil Circuit, Inc. (NYSE:JBL)

Is Jabil Circuit, Inc. (NYSE:JBL) ready to raly soon? Investors who are in the know are taking a bearish view. The number of bullish hedge fund bets decreased by 1 lately.

Jabil Circuit, Inc. (NYSE:JBL)

To most market participants, hedge funds are seen as slow, old investment tools of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey look at the crème de la crème of this club, around 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by paying attention to their top equity investments, we have come up with a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as important, bullish insider trading activity is another way to parse down the investments you’re interested in. There are plenty of incentives for an executive to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if shareholders know what to do (learn more here).

Consequently, it’s important to take a look at the latest action encompassing Jabil Circuit, Inc. (NYSE:JBL).

How are hedge funds trading Jabil Circuit, Inc. (NYSE:JBL)?

In preparation for this year, a total of 24 of the hedge funds we track were long in this stock, a change of -4% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Jabil Circuit, Inc. (NYSE:JBL). Citadel Investment Group has a $45 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $33 million position; 0% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Clint Carlson’s Carlson Capital, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.

Due to the fact that Jabil Circuit, Inc. (NYSE:JBL) has witnessed falling interest from the smart money, we can see that there were a few money managers who were dropping their positions entirely at the end of the year. It’s worth mentioning that John Hurley’s Cavalry Asset Management sold off the biggest investment of the “upper crust” of funds we watch, valued at an estimated $22 million in stock.. Neil Chriss’s fund, Hutchin Hill Capital, also sold off its stock, about $4 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds at the end of the year.

What have insiders been doing with Jabil Circuit, Inc. (NYSE:JBL)?

Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Jabil Circuit, Inc. (NYSE:JBL) has experienced 1 unique insiders buying, and 8 insider sales (see the details of insider trades here).

With the returns shown by our strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Jabil Circuit, Inc. (NYSE:JBL) is no exception.

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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.