Cowen Group, Inc. (NASDAQ:COWN) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. COWN investors should pay attention to a decrease in hedge fund sentiment lately. There were 14 hedge funds in our database with COWN holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are seen as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, we look at the elite of this club, around 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total capital, and by keeping an eye on their best stock picks, we have brought to light a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
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With these “truths” under our belt, it’s important to take a gander at the latest action encompassing Cowen Group, Inc. (NASDAQ:COWN).
How have hedgies been trading Cowen Group, Inc. (NASDAQ:COWN)?
Heading into 2013, a total of 14 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Cowen Group, Inc. (NASDAQ:COWN), worth close to $10 million, accounting for 0% of its total 13F portfolio. Sitting at the No. 2 spot is Debra Fine of Fine Capital Partners, with a $8 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Ian Cumming and Joseph Steinberg’s Leucadia National, John W. Rogers’s Ariel Investments and Martin Whitman’s Third Avenue Management.
Judging by the fact that Cowen Group, Inc. (NASDAQ:COWN) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds who were dropping their full holdings at the end of the year. It’s worth mentioning that Joseph A. Jolson’s Harvest Capital Strategies cut the largest stake of the “upper crust” of funds we key on, valued at close to $1 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $0 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Cowen Group, Inc. (NASDAQ:COWN)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, Cowen Group, Inc. (NASDAQ:COWN) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Cowen Group, Inc. (NASDAQ:COWN). These stocks are Piper Jaffray Companies (NYSE:PJC), FXCM Inc (NYSE:FXCM), Medley Capital Corp (NYSE:MCC), GFI Group Inc. (NYSE:GFIG), and Ladenburg Thalmann Financial Services (NYSEAMEX:LTS). This group of stocks belong to the investment brokerage – national industry and their market caps are closest to COWN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Piper Jaffray Companies (NYSE:PJC) | 10 | 0 | 4 |
| FXCM Inc (NYSE:FXCM) | 6 | 1 | 4 |
| Medley Capital Corp (NYSE:MCC) | 11 | 1 | 0 |
| GFI Group Inc. (NYSE:GFIG) | 4 | 0 | 2 |
| Ladenburg Thalmann Financial Services (NYSEAMEX:LTS) | 2 | 8 | 0 |
With the results shown by the aforementioned strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Cowen Group, Inc. (NASDAQ:COWN) is no exception.
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