Hedge Funds Aren’t Crazy About Arctic Cat Inc (ACAT) Anymore

Arctic Cat Inc (NASDAQ:ACAT) investors should be aware of a decrease in hedge fund interest in recent months.

In the financial world, there are tons of methods shareholders can use to track Mr. Market. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outperform the market by a solid margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to break down the marketplace. There are a variety of motivations for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this strategy if piggybackers know where to look (learn more here).

Now, we’re going to take a look at the latest action surrounding Arctic Cat Inc (NASDAQ:ACAT).

How are hedge funds trading Arctic Cat Inc (NASDAQ:ACAT)?

At the end of the first quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -23% from the first quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in Arctic Cat Inc (NASDAQ:ACAT). Royce & Associates has a $17.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Robert Bishop of Impala Asset Management, with a $12.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other peers with similar optimism include Cliff Asness’s AQR Capital Management, Boaz Weinstein’s Saba Capital and Joseph A. Jolson’s Harvest Capital Strategies.

Since Arctic Cat Inc (NASDAQ:ACAT) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Robert Joseph Caruso’s Select Equity Group sold off the biggest stake of all the hedgies we track, valued at an estimated $25.3 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund dropped about $2.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.

How have insiders been trading Arctic Cat Inc (NASDAQ:ACAT)?

Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last six-month time period, Arctic Cat Inc (NASDAQ:ACAT) has seen 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Arctic Cat Inc (NASDAQ:ACAT). These stocks are Polaris Industries Inc. (NYSE:PII), Thor Industries, Inc. (NYSE:THO), Drew Industries, Inc. (NYSE:DW), Federal Signal Corporation (NYSE:FSS), and Winnebago Industries, Inc. (NYSE:WGO). This group of stocks belong to the recreational vehicles industry and their market caps match ACAT’s market cap.

With the returns exhibited by the aforementioned tactics, retail investors must always watch hedge fund and insider trading sentiment, and Arctic Cat Inc (NASDAQ:ACAT) is an important part of this process.

Click here to learn why you should track hedge funds