According to most stock holders, hedge funds are viewed as underperforming, old investment vehicles of years past. While there are more than 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by watching their top stock picks, we have found a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as beneficial, bullish insider trading activity is another way to parse down the marketplace. There are many reasons for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the recent action encompassing Casey’s General Stores, Inc. (NASDAQ:CASY).
How have hedgies been trading Casey’s General Stores, Inc. (NASDAQ:CASY)?
Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of 38% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Orange Capital, managed by Daniel Lewis, holds the largest position in Casey’s General Stores, Inc. (NASDAQ:CASY). Orange Capital has a $35.1 million position in the stock, comprising 4.9% of its 13F portfolio. The second largest stake is held by Mario Gabelli of GAMCO Investors, with a $30.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Curtis Schenker and Craig Effron’s Scoggin, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Now, key hedge funds were leading the bulls’ herd. Scoggin, managed by Curtis Schenker and Craig Effron, assembled the most outsized position in Casey’s General Stores, Inc. (NASDAQ:CASY). Scoggin had 8.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $2.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.
Insider trading activity in Casey’s General Stores, Inc. (NASDAQ:CASY)
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time period, Casey’s General Stores, Inc. (NASDAQ:CASY) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Casey’s General Stores, Inc. (NASDAQ:CASY). These stocks are SUPERVALU INC. (NYSE:SVU), Susser Holdings Corporation (NYSE:SUSS), Weis Markets, Inc. (NYSE:WMK), The Fresh Market Inc (NASDAQ:TFM), and Harris Teeter Supermarkets Inc (NYSE:HTSI). This group of stocks are in the grocery stores industry and their market caps resemble CASY’s market cap.
