According to most market participants, hedge funds are viewed as slow, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, we choose to focus on the bigwigs of this club, around 450 funds. It is widely believed that this group oversees the majority of all hedge funds’ total capital, and by watching their top investments, we have come up with a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, positive insider trading sentiment is another way to parse down the world of equities. Obviously, there are lots of motivations for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if you know what to do (learn more here).
Keeping this in mind, it’s important to take a glance at the key action surrounding Spirit Airlines Incorporated (NASDAQ:SAVE).
What have hedge funds been doing with Spirit Airlines Incorporated (NASDAQ:SAVE)?
At the end of the first quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 7% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, PAR Capital Management, managed by Paul Reeder and Edward Shapiro, holds the largest position in Spirit Airlines Incorporated (NASDAQ:SAVE). PAR Capital Management has a $53.5 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Kevin Michael Ulrich of Anchorage Advisors, with a $21 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Joel Greenblatt’s Gotham Asset Management, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.
Consequently, some big names were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, established the most outsized position in Spirit Airlines Incorporated (NASDAQ:SAVE). Driehaus Capital had 5.6 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $1.4 million investment in the stock during the quarter. The only other fund with a brand new SAVE position is Steven Cohen’s SAC Capital Advisors.
How have insiders been trading Spirit Airlines Incorporated (NASDAQ:SAVE)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, Spirit Airlines Incorporated (NASDAQ:SAVE) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Spirit Airlines Incorporated (NASDAQ:SAVE). These stocks are Delta Air Lines, Inc. (NYSE:DAL), United Continental Holdings Inc (NYSE:UAL), China Southern Airlines Co Ltd (ADR) (NYSE:ZNH), China Eastern Airlines Corp. Ltd. (ADR) (NYSE:CEA), and US Airways Group, Inc. (NYSE:LCC). This group of stocks are in the major airlines industry and their market caps are similar to SAVE’s market cap.
