Hedge Funds Are Selling Silgan Holdings Inc. (SLGN)

Silgan Holdings Inc. (NASDAQ:SLGN) was in 15 hedge funds’ portfolio at the end of the first quarter of 2013. SLGN has seen a decrease in enthusiasm from smart money in recent months. There were 15 hedge funds in our database with SLGN holdings at the end of the previous quarter.

In the eyes of most traders, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, we hone in on the elite of this club, around 450 funds. It is widely believed that this group oversees most of the smart money’s total capital, and by tracking their top equity investments, we have brought to light a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 23.3 percentage points in 8 months (see the details here).

Just as integral, optimistic insider trading activity is another way to parse down the marketplace. There are a number of incentives for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).

Consequently, we’re going to take a look at the latest action regarding Silgan Holdings Inc. (NASDAQ:SLGN).

What does the smart money think about Silgan Holdings Inc. (NASDAQ:SLGN)?

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 0% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Amy Minella’s Cardinal Capital had the largest position in Silgan Holdings Inc. (NASDAQ:SLGN), worth close to $62.8 million, comprising 3.9% of its total 13F portfolio. On Cardinal Capital’s heels is Jim Simons of Renaissance Technologies, with a $12.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Charles Clough’s Clough Capital Partners, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.

Seeing as Silgan Holdings Inc. (NASDAQ:SLGN) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of money managers who sold off their positions entirely heading into Q2. Intriguingly, David Abrams’s Abrams Capital Management sold off the largest position of the 450+ funds we key on, valued at close to $31.5 million in stock.. Shane Finemore’s fund, Manikay Partners, also cut its stock, about $5.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Silgan Holdings Inc. (NASDAQ:SLGN)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the latest half-year time frame, Silgan Holdings Inc. (NASDAQ:SLGN) has seen zero unique insiders purchasing, and 8 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 Silgan Holdings Inc. (NASDAQ:SLGN). These stocks are Bemis Company, Inc. (NYSE:BMS), AptarGroup, Inc. (NYSE:ATR), Greif, Inc. (NYSE:GEF), Sonoco Products Company (NYSE:SON), and Graphic Packaging Holding Company (NYSE:GPK). This group of stocks belong to the packaging & containers industry and their market caps are closest to SLGN’s market cap.