Best Buy Co., Inc. (NYSE:BBY) has experienced an increase in hedge fund sentiment in recent months.
According to most shareholders, hedge funds are seen as slow, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, we at Insider Monkey look at the masters of this club, around 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by watching their highest performing equity investments, we have revealed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are many stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if investors know where to look (learn more here).
Consequently, it’s important to take a gander at the key action surrounding Best Buy Co., Inc. (NYSE:BBY).
What does the smart money think about Best Buy Co., Inc. (NYSE:BBY)?
At the end of the first quarter, a total of 36 of the hedge funds we track held long positions in this stock, a change of 13% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.
Of the funds we track, Ken Griffin’s Citadel Investment Group had the largest position in Best Buy Co., Inc. (NYSE:BBY), worth close to $126.7 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $96.4 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Jeffrey Vinik’s Vinik Asset Management, Alexander Mitchell’s Scopus Asset Management and Malcolm Fairbairn’s Ascend Capital.
Now, some big names have been driving this bullishness. Scopus Asset Management, managed by Alexander Mitchell, assembled the biggest position in Best Buy Co., Inc. (NYSE:BBY). Scopus Asset Management had 54.7 million invested in the company at the end of the quarter. Malcolm Fairbairn’s Ascend Capital also made a $49.8 million investment in the stock during the quarter. The other funds with brand new BBY positions are Philippe Laffont’s Coatue Management, Steven Cohen’s SAC Capital Advisors, and Alexander Mitchell’s Scopus Asset Management.
What do corporate executives and insiders think about Best Buy Co., Inc. (NYSE:BBY)?
Insider buying is particularly usable when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Best Buy Co., Inc. (NYSE:BBY) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Best Buy Co., Inc. (NYSE:BBY). These stocks are RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), CONN’S, Inc. (NASDAQ:CONN), , and GameStop Corp. (NYSE:GME). All of these stocks are in the electronics stores industry and their market caps match BBY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| RadioShack Corporation (NYSE:RSH) | 15 | 1 | 0 |
| hhgregg, Inc. (NYSE:HGG) | 12 | 0 | 1 |
| CONN’S, Inc. (NASDAQ:CONN) | 19 | 1 | 13 |
| GameStop Corp. (NYSE:GME) | 26 | 0 | 1 |
With the results shown by our research, everyday investors must always keep an eye on hedge fund and insider trading activity, and Best Buy Co., Inc. (NYSE:BBY) shareholders fit into this picture quite nicely.
