If you’d ask most investors, hedge funds are viewed as unimportant, old financial tools of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the elite of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total asset base, and by paying attention to their highest performing equity investments, we have spotted a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as important, optimistic insider trading activity is another way to parse down the investments you’re interested in. Obviously, there are lots of incentives for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if shareholders know where to look (learn more here).
Keeping this in mind, we’re going to take a look at the latest action encompassing URS Corp (NYSE:URS).
How have hedgies been trading URS Corp (NYSE:URS)?
In preparation for this year, a total of 17 of the hedge funds we track were long in this stock, a change of 6% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.
Of the funds we track, Larry Robbins’s Glenview Capital had the most valuable position in URS Corp (NYSE:URS), worth close to $146 million, comprising 2.1% of its total 13F portfolio. On Glenview Capital’s heels is D E Shaw, managed by D. E. Shaw, which held a $37 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Richard S. Pzena’s Pzena Investment Management, John A. Levin’s Levin Capital Strategies and Cliff Asness’s AQR Capital Management.
As aggregate interest increased, specific money managers were leading the bulls’ herd. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, assembled the most outsized position in URS Corp (NYSE:URS). LMR Partners had 5 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also made a $3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
What have insiders been doing with URS Corp (NYSE:URS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, URS Corp (NYSE:URS) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the results exhibited by our strategies, retail investors should always watch hedge fund and insider trading activity, and URS Corp (NYSE:URS) shareholders fit into this picture quite nicely.
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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
