International Game Technology (NYSE:IGT) investors should pay attention to a decrease in support from the world’s most elite money managers recently.
To most market participants, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds trading at present, we look at the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by monitoring their top investments, we have unearthed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as important, positive insider trading sentiment is another way to break down the world of equities. There are many motivations for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).
Now, we’re going to take a peek at the recent action surrounding International Game Technology (NYSE:IGT).
Hedge fund activity in International Game Technology (NYSE:IGT)
At year’s end, a total of 28 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Jeffrey Gates’s Gates Capital Management had the most valuable position in International Game Technology (NYSE:IGT), worth close to $124 million billion, accounting for 7.8% of its total 13F portfolio. On Gates Capital Management’s heels is John W. Rogers of Ariel Investments, with a $116 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Dmitry Balyasny’s Balyasny Asset Management, Ricky Sandler’s Eminence Capital and D. E. Shaw’s D E Shaw.
Because International Game Technology (NYSE:IGT) has experienced falling interest from the smart money, logic holds that there exists a select few hedgies that decided to sell off their full holdings at the end of the year. Interestingly, Daniel S. Och’s OZ Management said goodbye to the biggest position of the 450+ funds we key on, worth close to $61 million in stock., and Larry Foley and Paul Farrell of Bronson Point Partners was right behind this move, as the fund cut about $13 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in International Game Technology (NYSE:IGT)
Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the last six-month time frame, International Game Technology (NYSE:IGT) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned research, retail investors must always keep an eye on hedge fund and insider trading activity, and International Game Technology (NYSE:IGT) applies perfectly to this mantra.
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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
