The Shaw Group Inc. (NYSE:SHAW) investors should pay attention to a decrease in hedge fund sentiment recently.
In the financial world, there are plenty of gauges market participants can use to watch the equity markets. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the broader indices by a solid margin (see just how much).
Just as important, bullish insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are a variety of incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).
With all of this in mind, let’s take a peek at the latest action encompassing The Shaw Group Inc. (NYSE:SHAW).
What does the smart money think about The Shaw Group Inc. (NYSE:SHAW)?
Heading into 2013, a total of 25 of the hedge funds we track were bullish in this stock, a change of -17% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, David Costen Haley’s HBK Investments had the largest position in The Shaw Group Inc. (NYSE:SHAW), worth close to $154 million, comprising 3% of its total 13F portfolio. On HBK Investments’s heels is Pentwater Capital Management, managed by Matthew Halbower, which held a $148 million position; the fund has 5.4% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Thomas Steyer’s Farallon Capital, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
Due to the fact that The Shaw Group Inc. (NYSE:SHAW) has experienced falling interest from hedge fund managers, logic holds that there exists a select few money managers who sold off their positions entirely at the end of the year. It’s worth mentioning that Howard Guberman’s Gruss Asset Management dropped the largest investment of all the hedgies we key on, comprising close to $48 million in stock.. Brian Taylor’s fund, Pine River Capital Management, also dumped its stock, about $33 million worth. These transactions are interesting, as total hedge fund interest dropped by 5 funds at the end of the year.
Insider trading activity in The Shaw Group Inc. (NYSE:SHAW)
Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time period, The Shaw Group Inc. (NYSE:SHAW) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned research, everyday investors must always pay attention to hedge fund and insider trading activity, and The Shaw Group Inc. (NYSE:SHAW) is no exception.
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