Meritage Homes Corp (NYSE:MTH) shareholders have witnessed an increase in enthusiasm from smart money of late.
In the financial world, there are plenty of methods shareholders can use to watch Mr. Market. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can outclass the S&P 500 by a solid margin (see just how much).
Just as important, positive insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are a variety of incentives for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a glance at the key action regarding Meritage Homes Corp (NYSE:MTH).
What does the smart money think about Meritage Homes Corp (NYSE:MTH)?
In preparation for this quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of 122% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Meritage Homes Corp (NYSE:MTH). Citadel Investment Group has a $69.9 million position in the stock, comprising 0.1% of its 13F portfolio. On Citadel Investment Group’s heels is Columbus Circle Investors, managed by Donald Chiboucis, which held a $27.7 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital, Ken Heebner’s Capital Growth Management and Andrew Sandler’s Sandler Capital Management.
As aggregate interest increased, specific money managers have been driving this bullishness. Standard Pacific Capital, managed by Douglas Dillard Jr. and Raj D. Venkatesan, assembled the biggest position in Meritage Homes Corp (NYSE:MTH). Standard Pacific Capital had 21.9 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also made a $15.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Charles Davidson’s Wexford Capital, and Malcolm Fairbairn’s Ascend Capital.
Insider trading activity in Meritage Homes Corp (NYSE:MTH)
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Meritage Homes Corp (NYSE:MTH) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Meritage Homes Corp (NYSE:MTH). These stocks are Gafisa SA (ADR) (NYSE:GFA), The Ryland Group, Inc. (NYSE:RYL), Standard Pacific Corp. (NYSE:SPF), KB Home (NYSE:KBH), and M.D.C. Holdings, Inc. (NYSE:MDC). This group of stocks belong to the residential construction industry and their market caps match MTH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Gafisa SA (ADR) (NYSE:GFA) | 7 | 0 | 0 |
| The Ryland Group, Inc. (NYSE:RYL) | 16 | 0 | 0 |
| Standard Pacific Corp. (NYSE:SPF) | 19 | 0 | 3 |
| KB Home (NYSE:KBH) | 17 | 0 | 1 |
| M.D.C. Holdings, Inc. (NYSE:MDC) | 14 | 0 | 4 |
With the results demonstrated by our tactics, retail investors should always pay attention to hedge fund and insider trading activity, and Meritage Homes Corp (NYSE:MTH) shareholders fit into this picture quite nicely.
