Hedge Funds Are Buying Ingram Micro Inc. (IM)

Is Ingram Micro Inc. (NYSE:IM) ready to rally soon? The best stock pickers are in an optimistic mood. The number of long hedge fund positions rose by 1 in recent months.

If you’d ask most shareholders, hedge funds are perceived as unimportant, outdated financial tools of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this group, around 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by watching their highest performing picks, we have identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outclassed 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 activity is another way to break down the financial markets. Just as you’d expect, there are many motivations for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).

With all of this in mind, let’s take a gander at the recent action encompassing Ingram Micro Inc. (NYSE:IM).

What have hedge funds been doing with Ingram Micro Inc. (NYSE:IM)?

In preparation for this quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of 6% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.

According to our comprehensive database, Anthony Bozza’s Lakewood Capital Management had the largest position in Ingram Micro Inc. (NYSE:IM), worth close to $99 million, comprising 6.6% of its total 13F portfolio. Sitting at the No. 2 spot is Charles de Vaulx of International Value Advisers, with a $91.3 million position; 2.1% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Martin Whitman’s Third Avenue Management, Richard S. Pzena’s Pzena Investment Management and Cliff Asness’s AQR Capital Management.

As one would reasonably expect, key money managers have jumped into Ingram Micro Inc. (NYSE:IM) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the most valuable call position in Ingram Micro Inc. (NYSE:IM). Balyasny Asset Management had 1.9 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.7 million position during the quarter.

What do corporate executives and insiders think about Ingram Micro Inc. (NYSE:IM)?

Insider purchases made by high-level executives is best served when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time frame, Ingram Micro Inc. (NYSE:IM) has seen zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Ingram Micro Inc. (NYSE:IM). These stocks are Peerless Systems Corp. (NASDAQ:PRLS), SED International Holdings, Inc. (NYSEAMEX:SED), Wayside Technology Group, Inc. (NASDAQ:WSTG), Navarre Corporation (NASDAQ:NAVR), and Tech Data Corp (NASDAQ:TECD). This group of stocks are the members of the computers wholesale industry and their market caps resemble IM’s market cap.

With the results shown by our time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and Ingram Micro Inc. (NYSE:IM) is an important part of this process.

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