Sonic Automotive Inc (NYSE:SAH) was in 9 hedge funds’ portfolio at the end of December. SAH shareholders have witnessed an increase in hedge fund interest in recent months. There were 8 hedge funds in our database with SAH holdings at the end of the previous quarter.
At the moment, there are a multitude of gauges market participants can use to track Mr. Market. Some of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outpace their index-focused peers by a healthy margin (see just how much).
Just as important, positive insider trading sentiment is a second way to parse down the marketplace. There are many stimuli for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).
Consequently, let’s take a gander at the latest action encompassing Sonic Automotive Inc (NYSE:SAH).
How are hedge funds trading Sonic Automotive Inc (NYSE:SAH)?
At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of 13% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Hawkeye Capital, managed by Richard Rubin, holds the largest position in Sonic Automotive Inc (NYSE:SAH). Hawkeye Capital has a $31 million position in the stock, comprising 15.2% of its 13F portfolio. Sitting at the No. 2 spot is SG Capital Management, managed by Ken Grossman and Glen Schneider, which held a $7 million position; 3.7% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners.
Now, some big names were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the biggest position in Sonic Automotive Inc (NYSE:SAH). SG Capital Management had 7 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Joel Greenblatt’s Gotham Asset Management.
Insider trading activity in Sonic Automotive Inc (NYSE:SAH)
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the latest 180-day time frame, Sonic Automotive Inc (NYSE:SAH) has seen zero unique insiders purchasing, and 3 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 Sonic Automotive Inc (NYSE:SAH). These stocks are Penske Automotive Group, Inc. (NYSE:PAG), KAR Auction Services Inc (NYSE:KAR), Asbury Automotive Group, Inc. (NYSE:ABG), Lithia Motors Inc (NYSE:LAD), and Group 1 Automotive, Inc. (NYSE:GPI). This group of stocks are in the auto dealerships industry and their market caps are closest to SAH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Penske Automotive Group, Inc. (NYSE:PAG) | 9 | 0 | 0 |
| KAR Auction Services Inc (NYSE:KAR) | 15 | 0 | 17 |
| Asbury Automotive Group, Inc. (NYSE:ABG) | 15 | 0 | 4 |
| Lithia Motors Inc (NYSE:LAD) | 15 | 0 | 6 |
| Group 1 Automotive, Inc. (NYSE:GPI) | 11 | 0 | 3 |
With the results demonstrated by the aforementioned studies, retail investors should always monitor hedge fund and insider trading activity, and Sonic Automotive Inc (NYSE:SAH) is an important part of this process.
