Do Hedge Funds and Insiders Love Cavco Industries, Inc. (CVCO)?

Cavco Industries, Inc. (NASDAQ:CVCO) shareholders have witnessed a decrease in enthusiasm from smart money lately.

To most market participants, hedge funds are viewed as unimportant, old financial tools of years past. While there are greater than 8000 funds with their doors open at present, we look at the masters of this group, about 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by tracking their highest performing picks, we have uncovered a few investment strategies that have historically outstripped Mr. 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 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as beneficial, bullish insider trading activity is another way to parse down the investments you’re interested in. Obviously, there are a variety of incentives for an executive to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the latest action regarding Cavco Industries, Inc. (NASDAQ:CVCO).

How are hedge funds trading Cavco Industries, Inc. (NASDAQ:CVCO)?

In preparation for this quarter, a total of 4 of the hedge funds we track held long positions in this stock, a change of -33% from the first quarter.

Due to the fact that Cavco Industries, Inc. (NASDAQ:CVCO) has experienced falling interest from the smart money, logic holds that there was a specific group of funds who sold off their entire stakes last quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the largest investment of the 450+ funds we monitor, comprising an estimated $0.5 million in stock., and Peter Algert and Kevin Coldiron of Algert Coldiron Investors was right behind this move, as the fund dropped about $0.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds last quarter.

Insider trading activity in Cavco Industries, Inc. (NASDAQ:CVCO)

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, Cavco Industries, Inc. (NASDAQ:CVCO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Cavco Industries, Inc. (NASDAQ:CVCO). These stocks are Nobility Homes, Inc. (PINK:NOBH), Skyline Corporation (NYSE:SKY), and Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE). All of these stocks are in the manufactured housing industry and their market caps are closest to CVCO’s market cap.

With the returns demonstrated by the aforementioned studies, everyday investors must always watch hedge fund and insider trading activity, and Cavco Industries, Inc. (NASDAQ:CVCO) applies perfectly to this mantra.

Click here to learn why you should track hedge funds