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

PGT, Inc. (NASDAQ:PGTI) investors should pay attention to an increase in support from the world’s most elite money managers recently.

If you’d ask most investors, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the crème de la crème of this club, around 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total capital, and by monitoring their best investments, we have unearthed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as key, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are plenty of motivations for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).

With all of this in mind, let’s take a peek at the recent action surrounding PGT, Inc. (NASDAQ:PGTI).

Hedge fund activity in PGT, Inc. (NASDAQ:PGTI)

At Q1’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of 29% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in PGT, Inc. (NASDAQ:PGTI), worth close to $14.1 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $8.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Chuck Royce’s Royce & Associates, Richard Driehaus’s Driehaus Capital and Israel Englander’s Millennium Management.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, initiated the most outsized position in PGT, Inc. (NASDAQ:PGTI). Two Sigma Advisors had 0.6 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new PGTI position is Cliff Asness’s AQR Capital Management.

How are insiders trading PGT, Inc. (NASDAQ:PGTI)?

Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, PGT, Inc. (NASDAQ:PGTI) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to PGT, Inc. (NASDAQ:PGTI). These stocks are US Concrete Inc (NASDAQ:USCR), AAON, Inc. (NASDAQ:AAON), Quanex Building Products Corporation (NYSE:NX), U.S. Lime & Minerals Inc. (NASDAQ:USLM), and NCI Building Systems, Inc. (NYSE:NCS). All of these stocks are in the general building materials industry and their market caps match PGTI’s market cap.