Here is What Hedge Funds Think About Allegiant Travel Company (ALGT)

Allegiant Travel Company (NASDAQ:ALGT) was in 12 hedge funds’ portfolio at the end of March. ALGT has experienced an increase in hedge fund sentiment lately. There were 10 hedge funds in our database with ALGT positions at the end of the previous quarter.

To most stock holders, hedge funds are assumed to be worthless, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the leaders of this group, about 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total asset base, and by tracking their highest performing investments, we have formulated a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, positive insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are plenty of motivations for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the latest action regarding Allegiant Travel Company (NASDAQ:ALGT).

Hedge fund activity in Allegiant Travel Company (NASDAQ:ALGT)

At the end of the first quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 20% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Allegiant Travel Company (NASDAQ:ALGT). Renaissance Technologies has a $90 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Ric Dillon of Diamond Hill Capital, with a $9.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include D. E. Shaw’s D E Shaw, and Ken Griffin’s Citadel Investment Group.

Now, specific money managers have been driving this bullishness. Ellington, managed by Mike Vranos, initiated the biggest position in Allegiant Travel Company (NASDAQ:ALGT). Ellington had 1 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $1 million position during the quarter. The other funds with brand new ALGT positions are Israel Englander’s Millennium Management, David Costen Haley’s HBK Investments, and Joel Greenblatt’s Gotham Asset Management.

How are insiders trading Allegiant Travel Company (NASDAQ:ALGT)?

Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past six months. Over the last half-year time period, Allegiant Travel Company (NASDAQ:ALGT) has experienced zero unique insiders buying, and 7 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 Allegiant Travel Company (NASDAQ:ALGT). These stocks are Republic Airways Holdings Inc. (NASDAQ:RJET), Alaska Air Group, Inc. (NYSE:ALK), SkyWest, Inc. (NASDAQ:SKYW), JetBlue Airways Corporation (NASDAQ:JBLU), and Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL). This group of stocks are the members of the regional airlines industry and their market caps match ALGT’s market cap.

With the returns exhibited by the aforementioned research, retail investors should always monitor hedge fund and insider trading sentiment, and Allegiant Travel Company (NASDAQ:ALGT) is an important part of this process.

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