This Metric Says You Are Smart to Buy Hawaiian Holdings, Inc. (HA)

Hawaiian Holdings, Inc. (NASDAQ:HA) was in 16 hedge funds’ portfolio at the end of March. HA shareholders have witnessed an increase in hedge fund interest in recent months. There were 14 hedge funds in our database with HA holdings at the end of the previous quarter.

To most traders, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the upper echelon of this club, about 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total capital, and by keeping an eye on their highest performing picks, we have unearthed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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).

Equally as key, positive insider trading activity is a second way to break down the investments you’re interested in. 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 behave bullishly. Several empirical studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a look at the recent action encompassing Hawaiian Holdings, Inc. (NASDAQ:HA).

What does the smart money think about Hawaiian Holdings, Inc. (NASDAQ:HA)?

Heading into Q2, a total of 16 of the hedge funds we track were long in this stock, a change of 14% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Zac Hirzel’s Hirzel Capital Management had the most valuable position in Hawaiian Holdings, Inc. (NASDAQ:HA), worth close to $14.5 million, accounting for 5.1% of its total 13F portfolio. The second largest stake is held by Nokota Management, managed by Matthew Knauer and Mina Faltas, which held a $10.1 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

As one would reasonably expect, specific money managers have jumped into Hawaiian Holdings, Inc. (NASDAQ:HA) headfirst. Hirzel Capital Management, managed by Zac Hirzel, assembled the largest position in Hawaiian Holdings, Inc. (NASDAQ:HA). Hirzel Capital Management had 14.5 million invested in the company at the end of the quarter. Richard L. Haydon’s Yield Capital Partners (Y/Cap Management) also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Steven Cohen’s SAC Capital Advisors, Glenn Russell Dubin’s Highbridge Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.

What do corporate executives and insiders think about Hawaiian Holdings, Inc. (NASDAQ:HA)?

Insider buying is most useful when the company in focus has seen transactions within the past half-year. Over the last six-month time frame, Hawaiian Holdings, Inc. (NASDAQ:HA) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Hawaiian Holdings, Inc. (NASDAQ:HA). These stocks are Allegiant Travel Company (NASDAQ:ALGT), Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), SkyWest, Inc. (NASDAQ:SKYW), Republic Airways Holdings Inc. (NASDAQ:RJET), and Era Group Inc (NYSE:ERA). All of these stocks are in the regional airlines industry and their market caps are similar to HA’s market cap.

With the returns shown by the aforementioned time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Hawaiian Holdings, Inc. (NASDAQ:HA) applies perfectly to this mantra.

Click here to learn why you should track hedge funds