Is Stewart Enterprises, Inc. (NASDAQ:STEI) a buy, sell, or hold? Prominent investors are getting more optimistic. The number of long hedge fund bets inched up by 4 recently.
To most traders, hedge funds are assumed to be worthless, old investment tools of the past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this club, around 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by watching their highest performing picks, we have come up with a few investment strategies that have historically beaten the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading activity is another way to break down the financial markets. As the old adage goes: there are many motivations for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).
Now, let’s take a glance at the recent action encompassing Stewart Enterprises, Inc. (NASDAQ:STEI).
What does the smart money think about Stewart Enterprises, Inc. (NASDAQ:STEI)?
In preparation for this year, a total of 14 of the hedge funds we track were bullish in this stock, a change of 40% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Pentwater Capital Management, managed by Matthew Halbower, holds the biggest position in Stewart Enterprises, Inc. (NASDAQ:STEI). Pentwater Capital Management has a $82.5 million position in the stock, comprising 3% of its 13F portfolio. Coming in second is Ascend Capital, managed by Malcolm Fairbairn, which held a $10.8 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jane Mendillo’s Harvard Management Co, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, key money managers have jumped into Stewart Enterprises, Inc. (NASDAQ:STEI) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in Stewart Enterprises, Inc. (NASDAQ:STEI). Renaissance Technologies had 0.4 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $0.3 million position during the quarter. The other funds with brand new STEI positions are Ken Griffin’s Citadel Investment Group, Neil Chriss’s Hutchin Hill Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How are insiders trading Stewart Enterprises, Inc. (NASDAQ:STEI)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past six months. Over the last 180-day time period, Stewart Enterprises, Inc. (NASDAQ:STEI) has experienced 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Stewart Enterprises, Inc. (NASDAQ:STEI). These stocks are StoneMor Partners L.P. (NYSE:STON), eLong, Inc. (ADR) (NASDAQ:LONG), Regis Corporation (NYSE:RGS), Steiner Leisure Ltd (NASDAQ:STNR), and G&K Services Inc (NASDAQ:GK). This group of stocks belong to the personal services industry and their market caps are closest to STEI’s market cap.
