NVR, Inc. (NVR): Hedge Funds and Insiders Are Bullish, What Should You Do?

NVR, Inc. (NYSE:NVR) was in 20 hedge funds’ portfolio at the end of March. NVR investors should be aware of an increase in hedge fund interest lately. There were 18 hedge funds in our database with NVR holdings at the end of the previous quarter.

In today’s marketplace, there are tons of methods market participants can use to monitor Mr. Market. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outpace their index-focused peers by a very impressive amount (see just how much).

Equally as beneficial, optimistic insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are lots of stimuli for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if investors understand what to do (learn more here).

Now, it’s important to take a peek at the key action encompassing NVR, Inc. (NYSE:NVR).

What have hedge funds been doing with NVR, Inc. (NYSE:NVR)?

Heading into Q2, a total of 20 of the hedge funds we track held long positions in this stock, a change of 11% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Pennant Capital Management, managed by Alan Fournier, holds the most valuable position in NVR, Inc. (NYSE:NVR). Pennant Capital Management has a $280.1 million position in the stock, comprising 5.4% of its 13F portfolio. Sitting at the No. 2 spot is Robert Bishop of Impala Asset Management, with a $145.5 million position; the fund has 7.6% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Jason Capello’s Merchants’ Gate Capital, Ken Griffin’s Citadel Investment Group and Lee Ainslie’s Maverick Capital.

Now, specific money managers have jumped into NVR, Inc. (NYSE:NVR) headfirst. Capital Growth Management, managed by Ken Heebner, initiated the most outsized position in NVR, Inc. (NYSE:NVR). Capital Growth Management had 106.4 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $2.6 million position during the quarter. The following funds were also among the new NVR investors: Alec Litowitz and Ross Laser’s Magnetar Capital, David Costen Haley’s HBK Investments, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

How have insiders been trading NVR, Inc. (NYSE:NVR)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last six-month time period, NVR, Inc. (NYSE:NVR) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to NVR, Inc. (NYSE:NVR). These stocks are The Ryland Group, Inc. (NYSE:RYL), Lennar Corporation (NYSE:LEN), PulteGroup, Inc. (NYSE:PHM), D.R. Horton, Inc. (NYSE:DHI), and Toll Brothers Inc (NYSE:TOL). All of these stocks are in the residential construction industry and their market caps resemble NVR’s market cap.