Hedge Funds Are Selling Copa Holdings, S.A. (CPA) – Alaska Air Group, Inc. (ALK), Southwest Airlines Co. (LUV)

Copa Holdings, S.A. (NYSE:CPA) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. CPA investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 13 hedge funds in our database with CPA positions at the end of the previous quarter.

According to most traders, hedge funds are perceived as underperforming, old financial vehicles of the past. While there are more than 8000 funds trading at the moment, we look at the upper echelon of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by watching their top picks, we have unearthed a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as integral, positive insider trading activity is another way to parse down the marketplace. There are many incentives for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

With all of this in mind, we’re going to take a glance at the latest action encompassing Copa Holdings, S.A. (NYSE:CPA).

How have hedgies been trading Copa Holdings, S.A. (NYSE:CPA)?

At the end of the fourth quarter, a total of 12 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Farallon Capital, managed by Thomas Steyer, holds the largest position in Copa Holdings, S.A. (NYSE:CPA). Farallon Capital has a $14.5 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Vinik Asset Management, managed by Jeffrey Vinik, which held a $4.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Robert Bishop’s Impala Asset Management, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that Copa Holdings, S.A. (NYSE:CPA) has faced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few fund managers who sold off their full holdings heading into 2013. Interestingly, Israel Englander’s Millennium Management cut the largest investment of all the hedgies we track, comprising close to $13.9 million in stock., and Richard Driehaus of Driehaus Capital was right behind this move, as the fund said goodbye to about $6.4 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds heading into 2013.

How are insiders trading Copa Holdings, S.A. (NYSE:CPA)?

Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, Copa Holdings, S.A. (NYSE:CPA) has seen zero unique insiders buying, and zero 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 Copa Holdings, S.A. (NYSE:CPA). These stocks are JetBlue Airways Corporation (NASDAQ:JBLU), Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), LATAM Airlines Group SA (ADR) (NYSE:LFL), Southwest Airlines Co. (NYSE:LUV), and Alaska Air Group, Inc. (NYSE:ALK). This group of stocks are the members of the regional airlines industry and their market caps match CPA’s market cap.

With the returns demonstrated by the aforementioned tactics, everyday investors must always watch hedge fund and insider trading activity, and Copa Holdings, S.A. (NYSE:CPA) applies perfectly to this mantra.

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