Is Valmont Industries, Inc. (NYSE:VMI) a healthy stock for your portfolio? The smart money is in an optimistic mood. The number of bullish hedge fund bets increased by 10 lately.
If you’d ask most market participants, hedge funds are perceived as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, we at Insider Monkey choose to focus on the bigwigs of this group, around 450 funds.Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by monitoring their highest performing picks, we have brought to light a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as beneficial, bullish insider trading activity is another way to break down the stock market universe. There are a variety of stimuli for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
With these “truths” under our belt, we’re going to take a glance at the recent action regarding Valmont Industries, Inc. (NYSE:VMI).
Hedge fund activity in Valmont Industries, Inc. (NYSE:VMI)
At year’s end, a total of 23 of the hedge funds we track were bullish in this stock, a change of 77% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Valmont Industries, Inc. (NYSE:VMI). Royce & Associates has a $200 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Jeffrey Vinik of Vinik Asset Management, with a $16 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Israel Englander’s Millennium Management, Cliff Asness’ AQR Capital Management and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Vinik Asset Management, managed by Jeffrey Vinik, assembled the most outsized position in Valmont Industries, Inc. (NYSE:VMI). Vinik Asset Management had 16 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $3 million position during the quarter. The other funds with brand new VMI positions are Jim Simons’ Renaissance Technologies, Neil Chriss’ Hutchin Hill Capital, and Phil Frohlich’s Prescott Group Capital Management.
What have insiders been doing with Valmont Industries, Inc. (NYSE:VMI)?
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time frame, Valmont Industries, Inc. (NYSE:VMI) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s tactics, retail investors should always watch hedge fund and insider trading activity, and Valmont Industries, Inc. (NYSE:VMI) is an important part of this process.
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