Penske Automotive Group, Inc. (PAG): Insiders Aren’t Crazy About It

Penske Automotive Group, Inc. (NYSE:PAG) has experienced an increase in enthusiasm from smart money recently.

In the 21st century investor’s toolkit, there are many indicators shareholders can use to monitor publicly traded companies. A duo of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outperform their index-focused peers by a significant amount (see just how much).

Equally as integral, positive insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).

Now, it’s important to take a look at the key action surrounding Penske Automotive Group, Inc. (NYSE:PAG).

Hedge fund activity in Penske Automotive Group, Inc. (NYSE:PAG)

In preparation for this quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 67% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Penske Automotive Group, Inc. (NYSE:PAG). Royce & Associates has a $24.5 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is GAMCO Investors, managed by Mario Gabelli, which held a $16.7 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Dennis Leibowitz’s Act II Capital, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Act II Capital, managed by Dennis Leibowitz, established the most valuable position in Penske Automotive Group, Inc. (NYSE:PAG). Act II Capital had 12.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $3.4 million investment in the stock during the quarter. The following funds were also among the new PAG investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Costen Haley’s HBK Investments, and Steven Cohen’s SAC Capital Advisors.

How have insiders been trading Penske Automotive Group, Inc. (NYSE:PAG)?

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Penske Automotive Group, Inc. (NYSE:PAG) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Penske Automotive Group, Inc. (NYSE:PAG). These stocks are Group 1 Automotive, Inc. (NYSE:GPI), Sonic Automotive Inc (NYSE:SAH), AutoNation, Inc. (NYSE:AN), Copart, Inc. (NASDAQ:CPRT), and KAR Auction Services Inc (NYSE:KAR). This group of stocks belong to the auto dealerships industry and their market caps match PAG’s market cap.

With the returns shown by Insider Monkey’s strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Penske Automotive Group, Inc. (NYSE:PAG) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds