In the eyes of most shareholders, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, we look at the crème de la crème of this group, around 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing investments, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as beneficial, bullish insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are many stimuli for an insider to cut shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
With all of this in mind, it’s important to take a look at the recent action regarding Brunswick Corporation (NYSE:BC).
Hedge fund activity in Brunswick Corporation (NYSE:BC)
At year’s end, a total of 16 of the hedge funds we track were long in this stock, a change of -11% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Daruma Asset Management, managed by Mariko Gordon, holds the biggest position in Brunswick Corporation (NYSE:BC). Daruma Asset Management has a $72 million position in the stock, comprising 4.3% of its 13F portfolio. Coming in second is Bennett Lawrence Management, managed by Van Schreiber, which held a $22 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Alexander Mitchell’s Scopus Asset Management, Drew Cupps’s Cupps Capital Management and Andrew Sandler’s Sandler Capital Management.
Judging by the fact that Brunswick Corporation (NYSE:BC) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few funds that elected to cut their entire stakes in Q4. It’s worth mentioning that Israel Englander’s Millennium Management dumped the largest investment of the “upper crust” of funds we watch, valued at about $7 million in stock.. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds in Q4.
How are insiders trading Brunswick Corporation (NYSE:BC)?
Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time frame, Brunswick Corporation (NYSE:BC) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned strategies, everyday investors must always monitor hedge fund and insider trading activity, and Brunswick Corporation (NYSE:BC) is an important part of this process.
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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
