Main Street Capital Corporation (MAIN): Insiders Are Buying, Should You?: Dorchester Minerals LP (DMLP), Apollo Investment Corp. (AINV)

Main Street Capital Corporation (NYSE:MAIN) was in 4 hedge funds’ portfolio at the end of December. MAIN has experienced an increase in hedge fund sentiment in recent months. There were 3 hedge funds in our database with MAIN holdings at the end of the previous quarter.

In the financial world, there are tons of indicators investors can use to track publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the market by a solid amount (see just how much).

Equally as integral, positive insider trading activity is a second way to parse down the investments you’re interested in. There are plenty of incentives for an insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).

Now, it’s important to take a glance at the recent action surrounding Main Street Capital Corporation (NYSE:MAIN).

How have hedgies been trading Main Street Capital Corporation (NYSE:MAIN)?

At year’s end, a total of 4 of the hedge funds we track were long in this stock, a change of 33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Robert B. Gillam’s McKinley Capital Management had the most valuable position in Main Street Capital Corporation (NYSE:MAIN), worth close to $5.4 million, accounting for 0.3% of its total 13F portfolio. On McKinley Capital Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $5.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and D. E. Shaw’s D E Shaw.

As aggregate interest increased, some big names were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Main Street Capital Corporation (NYSE:MAIN). Citadel Investment Group had 5.1 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.

How have insiders been trading Main Street Capital Corporation (NYSE:MAIN)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest half-year time frame, Main Street Capital Corporation (NYSE:MAIN) has seen 10 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Main Street Capital Corporation (NYSE:MAIN). These stocks are Dorchester Minerals LP (NASDAQ:DMLP), Apollo Investment Corp. (NASDAQ:AINV), ViewPoint Financial Group (NASDAQ:VPFG), Tile Shop Hldgs, Inc. (NASDAQ:TTS), and Solar Capital Ltd. (NASDAQ:SLRC). This group of stocks are in the diversified investments industry and their market caps are closest to MAIN’s market cap.

With the returns exhibited by the aforementioned strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Main Street Capital Corporation (NYSE:MAIN) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds