Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Harbinger Group Inc (NYSE:HRG) based on that data.
Hedge fund interest in Harbinger Group Inc (NYSE:HRG) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Laclede Group Inc (NYSE:LG), Cantel Medical Corp. (NYSE:CMN), and Churchill Downs, Inc. (NASDAQ:CHDN) to gather more data points.
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At the moment, there are a large number of formulas market participants can use to analyze stocks. Two of the most under-the-radar formulas are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the market by a solid margin (see the details here).
Keeping this in mind, we’re going to take a glance at the recent action regarding Harbinger Group Inc (NYSE:HRG).
Hedge fund activity in Harbinger Group Inc (NYSE:HRG)
Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Leucadia National, managed by Ian Cumming and Joseph Steinberg, holds the largest position in Harbinger Group Inc (NYSE:HRG). Leucadia National has a $546.6 million position in the stock, comprising 100% of its 13F portfolio. The second largest stake is held by Fortress Investment Group, managed by Michael Novogratz, which holds a $387 million position; the fund has 5.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish encompass Phil Falcone’s Harbinger, Leon Cooperman’s Omega Advisors, and Jason Karp’s Tourbillon Capital Partners.
Seeing as Harbinger Group Inc (NYSE:HRG) has experienced a falling interest from the smart money, logic holds that there was a specific group of hedgies that elected to cut their full holdings in the third quarter. Intriguingly, Chuck Royce’s Royce & Associates cut the biggest investment of the 700 funds monitored by Insider Monkey, comprising about $6.3 million in stock. Min Htoo and Jordan Teramo’s fund, Anandar Capital Management, also said goodbye to its stock, about $3.7 million worth of shares. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Harbinger Group Inc (NYSE:HRG). These stocks are Laclede Group Inc (NYSE:LG), Cantel Medical Corp. (NYSE:CMN), Churchill Downs, Inc. (NASDAQ:CHDN), and Murphy USA Inc (NYSE:MUSA). All of these stocks’ market caps match Harbinger Group Inc (NYSE:HRG)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LG | 8 | 84602 | -1 |
| CMN | 6 | 133874 | 0 |
| CHDN | 26 | 765391 | 4 |
| MUSA | 22 | 208731 | 3 |
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $298 million. That figure was $1.67 million in Harbinger Group Inc (NYSE:HRG)’s case. Churchill Downs, Inc. (NASDAQ:CHDN) is the most popular stock in this table. On the other hand, Cantel Medical Corp. (NYSE:CMN) is the least popular one with only 6 bullish hedge fund positions. Harbinger Group Inc (NYSE:HRG) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Churchill Downs, Inc. (NASDAQ:CHDN) might be a better candidate to consider a long position.
