SBA Communications Corporation (SBAC): Insiders Aren’t Crazy About It

Is SBA Communications Corporation (NASDAQ:SBAC) a bargain? The best stock pickers are becoming less hopeful. The number of long hedge fund bets were cut by 6 lately.

In the eyes of most traders, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we look at the leaders of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total capital, and by tracking their top picks, we have figured out a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 23.3 percentage points in 8 months (check out a sample of our picks).

Just as beneficial, positive insider trading sentiment is a second way to parse down the world of equities. As the old adage goes: there are plenty of motivations for an insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if you know where to look (learn more here).

Now, we’re going to take a gander at the key action regarding SBA Communications Corporation (NASDAQ:SBAC).

What have hedge funds been doing with SBA Communications Corporation (NASDAQ:SBAC)?

At Q1’s end, a total of 37 of the hedge funds we track were long in this stock, a change of -14% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in SBA Communications Corporation (NASDAQ:SBAC). Citadel Investment Group has a $237.6 million position in the stock, comprising 0.4% of its 13F portfolio. On Citadel Investment Group’s heels is Jim Simons of Renaissance Technologies, with a $135.9 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Sean Cullinan’s Point State Capital, Doug Silverman and Alexander Klabin’s Senator Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.

Since SBA Communications Corporation (NASDAQ:SBAC) has faced declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of fund managers that slashed their entire stakes at the end of the first quarter. Intriguingly, Keith Meister’s Corvex Capital sold off the biggest investment of all the hedgies we track, worth about $28.9 million in stock.. Malcolm Fairbairn’s fund, Ascend Capital, also cut its stock, about $23.7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 6 funds at the end of the first quarter.

Insider trading activity in SBA Communications Corporation (NASDAQ:SBAC)

Insider buying is most useful when the company in question has seen transactions within the past six months. Over the last half-year time period, SBA Communications Corporation (NASDAQ:SBAC) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). These stocks are Avis Budget Group Inc. (NASDAQ:CAR), Ryder System, Inc. (NYSE:R), AMERCO (NASDAQ:UHAL), United Rentals, Inc. (NYSE:URI), and Hertz Global Holdings, Inc. (NYSE:HTZ). This group of stocks belong to the rental & leasing services industry and their market caps are closest to SBAC’s market cap.

With the returns exhibited by our research, retail investors should always watch hedge fund and insider trading activity, and SBA Communications Corporation (NASDAQ:SBAC) is no exception.

Click here to learn why you should track hedge funds