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Hedge Funds Are Betting On Harley-Davidson

Hedge Fund Portfolios Now Including Harley-Davidson

By Arnold Frias  for InsiderMonkey

 

Harley-Davidson, Inc. (NYSE:HOG) was in 30 hedge funds’ portfolio at the end of March. HOG has experienced an increase in hedge fund interest of late. There were 27 hedge funds in our database with HOG positions at the end of the previous quarter. According to most traders, hedge funds are seen as unimportant, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the masters of this club, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top stock picks, we have spotted a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August). Just as beneficial, bullish insider trading sentiment is another way to break down the financial markets. There are a variety of stimuli for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if “monkeys” know where to look (learn more here). With all of this in mind, let’s take a look at the latest action encompassing Harley-Davidson, Inc. (NYSE:HOG).

What does the smart money think about Harley-Davidson, Inc. (NYSE:HOG)?

In preparation for this quarter, a total of 30 of the hedge funds we track were long in this stock, a change of 11% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings substantially. Of the funds we track, Robert Joseph Caruso’s Select Equity Group had the largest position in Harley-Davidson, Inc. (NYSE:HOG), worth close to $266.4 million, accounting for 3.6% of its total 13F portfolio. Sitting at the No. 2 spot is Steven Cohen of SAC Capital Advisors, with a $116.2 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Robert Bishop’s Impala Asset Management, Patrick McCormack’s Tiger Consumer Management and Malcolm Fairbairn’s Ascend Capital. Consequently, some big names have been driving this bullishness. Ascend Capital, managed by Malcolm Fairbairn, established the most outsized position in Harley-Davidson, Inc. (NYSE:HOG). Ascend Capital had 39.7 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also made a $37.5 million investment in the stock during the quarter. The following funds were also among the new HOG investors: Alexander Mitchell’s Scopus Asset Management, SAC Subsidiary’s CR Intrinsic Investors, and Jeffrey Vinik’s Vinik Asset Management.

Insider trading activity in Harley-Davidson, Inc. (NYSE:HOG)

Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past half-year. Over the latest half-year time period, Harley-Davidson, Inc. (NYSE:HOG) has experienced zero unique insiders purchasing, and 6 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 Harley-Davidson, Inc. (NYSE:HOG). These stocks are Arctic Cat Inc (NASDAQ:ACAT), Winnebago Industries, Inc. (NYSE:WGO), Drew Industries, Inc. (NYSE:DW), Thor Industries, Inc. (NYSE:THO), and Polaris Industries Inc. (NYSE:PII). This group of stocks are the members of the recreational vehicles industry and their market caps are similar to HOG’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Arctic Cat Inc (NASDAQ:ACAT) 10 1 3
Winnebago Industries, Inc. (NYSE:WGO) 11 2 0
Drew Industries, Inc. (NYSE:DW) 16 0 8
Thor Industries, Inc. (NYSE:THO) 14 1 2
Polaris Industries Inc. (NYSE:PII) 23 0 5

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