To most shareholders, hedge funds are perceived as underperforming, outdated financial tools of years past. While there are more than 8000 funds trading today, we at Insider Monkey hone in on the aristocrats of this group, about 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their best picks, we have deciphered a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as important, optimistic insider trading sentiment is a second way to parse down the financial markets. There are a number of motivations for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
Consequently, it’s important to take a glance at the latest action regarding Delek US Holdings, Inc. (NYSE:DK).
How have hedgies been trading Delek US Holdings, Inc. (NYSE:DK)?
In preparation for this year, a total of 16 of the hedge funds we track held long positions in this stock, a change of 78% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Jim Simons’s Renaissance Technologies had the largest position in Delek US Holdings, Inc. (NYSE:DK), worth close to $41 million, comprising 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Steadfast Capital Management, managed by Robert Pitts, which held a $9 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Andrew Sandler’s Sandler Capital Management.
As one would reasonably expect, specific money managers have been driving this bullishness. Steadfast Capital Management, managed by Robert Pitts, assembled the most outsized position in Delek US Holdings, Inc. (NYSE:DK). Steadfast Capital Management had 9 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also initiated a $5 million position during the quarter. The other funds with brand new DK positions are D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group, and Neil Chriss’s Hutchin Hill Capital.
What do corporate executives and insiders think about Delek US Holdings, Inc. (NYSE:DK)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Delek US Holdings, Inc. (NYSE:DK) has experienced zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey’s time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Delek US Holdings, Inc. (NYSE:DK) shareholders fit into this picture quite nicely.
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