In the eyes of most traders, hedge funds are seen as underperforming, outdated financial tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the aristocrats of this club, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by tracking their highest performing picks, we have identified a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as important, optimistic insider trading sentiment is a second way to parse down the world of equities. There are a number of motivations for an insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action surrounding Genuine Parts Company (NYSE:GPC).
What does the smart money think about Genuine Parts Company (NYSE:GPC)?
In preparation for this year, a total of 17 of the hedge funds we track held long positions in this stock, a change of 13% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Mario Gabelli’s GAMCO Investors had the largest position in Genuine Parts Company (NYSE:GPC), worth close to $177 million, comprising 1.3% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $71 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and David Harding’s Winton Capital Management.
Consequently, some big names were leading the bulls’ herd. Dialectic Capital Management, managed by John Fichthorn, created the most valuable position in Genuine Parts Company (NYSE:GPC). Dialectic Capital Management had 2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $1 million position during the quarter. The other funds with new positions in the stock are David Costen Haley’s HBK Investments and Andy Redleaf’s Whitebox Advisors.
What have insiders been doing with Genuine Parts Company (NYSE:GPC)?
Bullish insider trading is best served when the company in question has seen transactions within the past six months. Over the latest six-month time period, Genuine Parts Company (NYSE:GPC) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s studies, retail investors must always keep an eye on hedge fund and insider trading activity, and Genuine Parts Company (NYSE:GPC) shareholders fit into this picture quite nicely.
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