Is it smart to be bullish on Solar Capital Ltd. (NASDAQ:SLRC)?
To the average investor, there are plenty of indicators investors can use to track the equity markets. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the S&P 500 by a significant amount (see just how much).
Just as key, bullish insider trading sentiment is a second way to look at the marketplace. Just as you’d expect, there are a number of incentives for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).
What’s more, let’s examine the recent info surrounding Solar Capital Ltd. (NASDAQ:SLRC).
What does the smart money think about Solar Capital Ltd. (NASDAQ:SLRC)?
In preparation for the third quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -10% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.
According to our 13F database, Ken Griffin’s Citadel Investment Group had the largest position in Solar Capital Ltd. (NASDAQ:SLRC), worth close to $8.3 million, comprising less than 0.1%% of its total 13F portfolio. On Citadel Investment Group’s heels is Pine River Capital Management, managed by Brian Taylor, which held a $7 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Robert Raiff’s Raiff Partners and Robert B. Gillam’s McKinley Capital Management.
Because Solar Capital Ltd. (NASDAQ:SLRC) has experienced dropping sentiment from upper-tier hedge fund managers, it’s safe to say that there lies a certain “tier” of funds who were dropping their entire stakes at the end of the second quarter. Intriguingly, D. E. Shaw’s D E Shaw dropped the biggest position of the 450+ funds we key on, valued at close to $1.9 million in stock. Bill Miller’s fund, Legg Mason Capital Management, also sold off its stock, about $0.4 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds at the end of the second quarter.
What have insiders been doing with Solar Capital Ltd. (NASDAQ:SLRC)?
Insider buying is best served when the company in question has seen transactions within the past six months. Over the last 180-day time frame, Solar Capital Ltd. (NASDAQ:SLRC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Solar Capital Ltd. (NASDAQ:SLRC). These stocks are Sabine Royalty Trust (NYSE:SBR), Dorchester Minerals LP (NASDAQ:DMLP), ViewPoint Financial Group (NASDAQ:VPFG), Tile Shop Hldgs, Inc. (NASDAQ:TTS), and Main Street Capital Corporation (NYSE:MAIN). This group of stocks are in the diversified investments industry and their market caps resemble SLRC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Sabine Royalty Trust (NYSE:SBR) | 4 | 0 | 0 |
| Dorchester Minerals LP (NASDAQ:DMLP) | 4 | 0 | 0 |
| ViewPoint Financial Group (NASDAQ:VPFG) | 5 | 0 | 0 |
| Tile Shop Hldgs, Inc. (NASDAQ:TTS) | 10 | 0 | 0 |
| Main Street Capital Corporation (NYSE:MAIN) | 5 | 0 | 0 |
Using the returns explained by our tactics, average investors must always pay attention to hedge fund and insider trading sentiment, and Solar Capital Ltd. (NASDAQ:SLRC) is no exception.
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Here is What Hedge Funds Think About Solar Capital Ltd. (SLRC)
