AAON, Inc. (NASDAQ:AAON) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. AAON shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 3 hedge funds in our database with AAON positions at the end of the previous quarter.
According to most investors, hedge funds are assumed to be slow, outdated financial tools of yesteryear. While there are more than 8000 funds with their doors open today, we look at the masters of this group, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by paying attention to their best stock picks, we have deciphered a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as integral, optimistic insider trading sentiment is another way to parse down the world of equities. Obviously, there are a variety of incentives for an insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).
Now, it’s important to take a peek at the latest action surrounding AAON, Inc. (NASDAQ:AAON).
How are hedge funds trading AAON, Inc. (NASDAQ:AAON)?
At the end of the fourth quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 233% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in AAON, Inc. (NASDAQ:AAON), worth close to $40 million, accounting for 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Millennium Management, managed by Israel Englander, which held a $3 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, D. E. Shaw’s D E Shaw and Glenn Russell Dubin’s Highbridge Capital Management.
As one would reasonably expect, key money managers have jumped into AAON, Inc. (NASDAQ:AAON) headfirst. Gotham Asset Management, managed by Joel Greenblatt, established the most outsized position in AAON, Inc. (NASDAQ:AAON). Gotham Asset Management had 2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $1 million investment in the stock during the quarter. The other funds with brand new AAON positions are Ken Brodkowitz and Mike Vermut’s Newland Capital, Ken Griffin’s Citadel Investment Group, and Cliff Asness’s AQR Capital Management.
How have insiders been trading AAON, Inc. (NASDAQ:AAON)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time frame, AAON, Inc. (NASDAQ:AAON) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to AAON, Inc. (NASDAQ:AAON). These stocks are Apogee Enterprises, Inc. (NASDAQ:APOG), Headwaters Inc (NYSE:HW), Universal Forest Products, Inc. (NASDAQ:UFPI), Quanex Building Products Corporation (NYSE:NX), and Griffon Corporation (NYSE:GFF). This group of stocks are the members of the general building materials industry and their market caps are similar to AAON’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Apogee Enterprises, Inc. (NASDAQ:APOG) | 12 | 0 | 3 |
| Headwaters Inc (NYSE:HW) | 22 | 0 | 3 |
| Universal Forest Products, Inc. (NASDAQ:UFPI) | 8 | 0 | 4 |
| Quanex Building Products Corporation (NYSE:NX) | 11 | 0 | 0 |
| Griffon Corporation (NYSE:GFF) | 9 | 0 | 0 |
With the returns demonstrated by our studies, retail investors should always keep an eye on hedge fund and insider trading activity, and AAON, Inc. (NASDAQ:AAON) shareholders fit into this picture quite nicely.
