Is SkyWest, Inc. (SKYW) Going to Burn These Hedge Funds?
Is it smart to be bullish on SkyWest, Inc. (NASDAQ:SKYW)?
To many of your peers, hedge funds are seen as bloated, old financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open currently, Insider Monkey aim at the upper echelon of this club, close to 525 funds. Analysts calculate that this group oversees the lion's share of all hedge funds' total assets, and by monitoring their highest quality investments, we've brought to light a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as useful, optimistic insider trading activity is a second way to look at the world of equities. Obviously, there are lots of reasons for an insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).
Now that that's out of the way, it's important to discuss the latest info surrounding SkyWest, Inc. (NASDAQ:SKYW).
What have hedge funds been doing with SkyWest, Inc. (NASDAQ:SKYW)?
At Q2's end, a total of 9 of the hedge funds we track were bullish in this stock, a change of -25% from the first quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.
According to our 13F database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in SkyWest, Inc. (NASDAQ:SKYW). Renaissance Technologies has a $7.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $3.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Joel Greenblatt's Gotham Asset Management and Paul Tudor Jones's Tudor Investment Corp.
Due to the fact SkyWest, Inc. (NASDAQ:SKYW) has experienced a fall in interest from the top-tier hedge fund industry, it's safe to say that there exists a select few funds that slashed their entire stakes in Q1. Interestingly, Jeffrey Vinik's Vinik Asset Management cut the biggest position of the 450+ funds we watch, worth an estimated $21 million in stock, and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund sold off about $0.4 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds in Q1.
What do corporate executives and insiders think about SkyWest, Inc. (NASDAQ:SKYW)?
Insider buying is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, SkyWest, Inc. (NASDAQ:SKYW) has seen zero unique insiders buying, 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 SkyWest, Inc. (NASDAQ:SKYW). These stocks are JetBlue Airways Corporation (NASDAQ:JBLU), Allegiant Travel Company (NASDAQ:ALGT), Era Group Inc (NYSE:ERA), Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), and Republic Airways Holdings Inc. (NASDAQ:RJET). This group of stocks are the members of the regional airlines industry and their market caps are similar to SKYW's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
JetBlue Airways Corporation (NASDAQ:JBLU)
Allegiant Travel Company (NASDAQ:ALGT)
Era Group Inc (NYSE:ERA)
Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL)
Republic Airways Holdings Inc. (NASDAQ:RJET)
Using the returns explained by Insider Monkey's tactics, regular investors must always pay attention to hedge fund and insider trading sentiment, and SkyWest, Inc. (NASDAQ:SKYW) is an important part of this process.