Nautilus, Inc. (NYSE:NLS) was in 8 hedge funds’ portfolio at the end of March. NLS shareholders have witnessed an increase in hedge fund sentiment lately. There were 4 hedge funds in our database with NLS positions at the end of the previous quarter.
To most traders, hedge funds are assumed to be underperforming, outdated investment tools of the past. While there are over 8000 funds in operation today, we choose to focus on the masters of this group, close to 450 funds. It is estimated that this group oversees the majority of the smart money’s total asset base, and by paying attention to their highest performing picks, we have unsheathed a number of investment strategies that have historically outpaced Mr. Market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as key, optimistic insider trading sentiment is another way to break down the world of equities. Just as you’d expect, there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
With all of this in mind, we’re going to take a peek at the latest action regarding Nautilus, Inc. (NYSE:NLS).
Hedge fund activity in Nautilus, Inc. (NYSE:NLS)
In preparation for this quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 100% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Jim Simons’s Renaissance Technologies had the largest position in Nautilus, Inc. (NYSE:NLS), worth close to $1.8 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, which held a $1.3 million position; 0.4% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Robert B. Gillam’s McKinley Capital Management, Chuck Royce’s Royce & Associates and Neil Chriss’s Hutchin Hill Capital.
As one would reasonably expect, specific money managers have been driving this bullishness. McKinley Capital Management, managed by Robert B. Gillam, established the largest position in Nautilus, Inc. (NYSE:NLS). McKinley Capital Management had 1.2 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital, Ken Griffin’s Citadel Investment Group, and Cliff Asness’s AQR Capital Management.
How are insiders trading Nautilus, Inc. (NYSE:NLS)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Nautilus, Inc. (NYSE:NLS) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Nautilus, Inc. (NYSE:NLS). These stocks are Pool Corporation (NASDAQ:POOL), Escalade, Inc. (NASDAQ:ESCA), Callaway Golf Co (NYSE:ELY), Black Diamond Inc (NASDAQ:BDE), and Johnson Outdoors Inc. (NASDAQ:JOUT). This group of stocks are the members of the sporting goods industry and their market caps are similar to NLS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Pool Corporation (NASDAQ:POOL) | 13 | 0 | 8 |
| Escalade, Inc. (NASDAQ:ESCA) | 2 | 2 | 1 |
| Callaway Golf Co (NYSE:ELY) | 9 | 2 | 0 |
| Black Diamond Inc (NASDAQ:BDE) | 7 | 0 | 0 |
| Johnson Outdoors Inc. (NASDAQ:JOUT) | 4 | 0 | 2 |
With the results shown by the aforementioned tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Nautilus, Inc. (NYSE:NLS) applies perfectly to this mantra.
