Hedge Funds Are Betting On Navistar International Corp (NAV)

Is Navistar International Corp (NYSE:NAV) the right investment to pursue these days? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets improved by 1 lately.

To most market participants, hedge funds are assumed to be slow, old financial vehicles of the past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey look at the crème de la crème of this club, about 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total capital, and by tracking their best picks, we have brought to light a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as important, bullish insider trading sentiment is a second way to parse down the financial markets. Just as you’d expect, there are plenty of incentives for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, let’s take a glance at the recent action regarding Navistar International Corp (NYSE:NAV).

Hedge fund activity in Navistar International Corp (NYSE:NAV)

At Q1’s end, a total of 20 of the hedge funds we track held long positions in this stock, a change of 5% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, MHR Fund Management, managed by Mark Rachesky, holds the biggest position in Navistar International Corp (NYSE:NAV). MHR Fund Management has a $414.8 million position in the stock, comprising 14.7% of its 13F portfolio. Sitting at the No. 2 spot is Icahn Capital LP, managed by Carl Icahn, which held a $409.5 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Mario Gabelli’s GAMCO Investors, Rob Citrone’s Discovery Capital Management and Kenneth Mario Garschina’s Mason Capital Management.

As one would reasonably expect, key money managers have jumped into Navistar International Corp (NYSE:NAV) headfirst. MHR Fund Management, managed by Mark Rachesky, established the biggest position in Navistar International Corp (NYSE:NAV). MHR Fund Management had 414.8 million invested in the company at the end of the quarter. Rob Citrone’s Discovery Capital Management also initiated a $120.6 million position during the quarter. The following funds were also among the new NAV investors: Kenneth Mario Garschina’s Mason Capital Management, Crispin Odey’s Odey Asset Management Group, and Don Morgan’s Brigade Capital.

How have insiders been trading Navistar International Corp (NYSE:NAV)?

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Navistar International Corp (NYSE:NAV) has experienced 3 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Navistar International Corp (NYSE:NAV). These stocks are Accuride Corporation (NYSE:ACW), PACCAR Inc (NASDAQ:PCAR), Wabash National Corporation (NYSE:WNC), Hyster-Yale Materials Handling Inc (NYSE:HY), and Oshkosh Corporation (NYSE:OSK). This group of stocks are the members of the trucks & other vehicles industry and their market caps are closest to NAV’s market cap.

With the results exhibited by our time-tested strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Navistar International Corp (NYSE:NAV) shareholders fit into this picture quite nicely.

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