In today’s marketplace, there are tons of metrics investors can use to monitor their holdings. A duo of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can trounce the broader indices by a solid amount (see just how much).
Equally as necessary, optimistic insider trading sentiment is another way to look at the investments you’re interested in. Just as you’d expect, there are a number of motivations for an insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if you know what to do (learn more here).
Furthermore, it’s important to analyze the latest info for KAR Auction Services Inc (NYSE:KAR).
How have hedgies been trading KAR Auction Services Inc (NYSE:KAR)?
In preparation for the third quarter, a total of 24 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
According to our 13F database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in KAR Auction Services Inc (NYSE:KAR). Citadel Investment Group has a $104.6 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Cardinal Capital, managed by Amy Minella, which held a $53.1 million position; the fund has 3.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Jay Petschek and Steven Major’s Corsair Capital Management, Daniel S. Och’s OZ Management and Steven Cohen’s SAC Capital Advisors.
As KAR Auction Services Inc (NYSE:KAR) has faced bearish sentiment from the smart money’s best and brightest, logic holds that there lies a certain “tier” of money managers that elected to cut their positions entirely in Q1. It’s worth mentioning that Jeffrey Gates’s Gates Capital Management cut the largest stake of the 450+ funds we track, valued at close to $9.3 million in stock, and Joshua Friedman and Mitchell Julis of Canyon Capital Advisors was right behind this move, as the fund sold off about $7 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading KAR Auction Services Inc (NYSE:KAR)?
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time frame, KAR Auction Services Inc (NYSE:KAR) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to KAR Auction Services Inc (NYSE:KAR). These stocks are Group 1 Automotive, Inc. (NYSE:GPI), Sonic Automotive Inc (NYSE:SAH), AutoNation, Inc. (NYSE:AN), Copart, Inc. (NASDAQ:CPRT), and Penske Automotive Group, Inc. (NYSE:PAG). This group of stocks are in the auto dealerships industry and their market caps are closest to KAR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Group 1 Automotive, Inc. (NYSE:GPI) | 16 | 0 | 0 |
| Sonic Automotive Inc (NYSE:SAH) | 16 | 0 | 0 |
| AutoNation, Inc. (NYSE:AN) | 26 | 0 | 0 |
| Copart, Inc. (NASDAQ:CPRT) | 40 | 0 | 0 |
| Penske Automotive Group, Inc. (NYSE:PAG) | 18 | 0 | 0 |
Using the returns explained by Insider Monkey’s studies, average investors should always watch hedge fund and insider trading sentiment, and KAR Auction Services Inc (NYSE:KAR) applies perfectly to this mantra.
