In the eyes of most traders, hedge funds are assumed to be slow, old financial tools of years past. While there are over 8000 funds with their doors open at the moment, we look at the aristocrats of this group, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by paying attention to their highest performing investments, we have formulated a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed 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 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are a variety of reasons for an insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).
Now, let’s take a glance at the latest action encompassing Homex Development Corp. (ADR) (NYSE:HXM).
How are hedge funds trading Homex Development Corp. (ADR) (NYSE:HXM)?
In preparation for this year, a total of 7 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in Homex Development Corp. (ADR) (NYSE:HXM). Royce & Associates has a $3.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Mike Vranos’s Ellington, Jim Simons’s Renaissance Technologies and Ken Griffin’s Citadel Investment Group.
Because Homex Development Corp. (ADR) (NYSE:HXM) has experienced stagnant sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds that elected to cut their full holdings last quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the biggest stake of all the hedgies we monitor, valued at close to $1 million in stock.. Barton Biggs’s fund, Traxis Partners, also said goodbye to its stock, about $0.6 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Homex Development Corp. (ADR) (NYSE:HXM)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last half-year time frame, Homex Development Corp. (ADR) (NYSE:HXM) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Homex Development Corp. (ADR) (NYSE:HXM). These stocks are Agree Realty Corporation (NYSE:ADC), Tejon Ranch Company (NYSE:TRC), E-House (China) Holdings Limited (ADR) (NYSE:EJ), and Campus Crest Communities Inc (NYSE:CCG). All of these stocks are in the property management industry and their market caps are similar to HXM’s market cap.
