How to replicate hedge fund investments, leverage their influence & work to make profits
Below is a general and crude aggregate of 100s of investments made by 10 prominent activist investors and hedge funds. The performance is measured from the time the investors made their purchases according to the associated 13D filing (required SEC ownership disclosure for owners >5%).
For a blind general aggregate, the results in figure 1 are indicative of the potential for investing alongside hedge funds who in many cases have an agenda to unlock value in the target company. We have found that using 13D filings as an idea generation tool can be powerful – however there is a need to tediously sift through many filings daily, sorting and analyzing to separate the noise from the meaningful opportunities. This is why we created 13dfiling.com, first as a tool for our own strategy and 2nd as a way to open it up to fellow investors to help spread the cost of building the system and to continue making it more powerful for our mutual benefit.
13D Filing Tools Overview:
Subscribers get customizable real time email alerts when hedge funds make 13D filings with the SEC (Figure 3. Sample Alert). Alerts include key data points and you can create your own filters depending on what you want to follow (Figure 2: Filter Dashboard).
Enhanced 13D Filing Database with Mined Data:
View, sort and filter filings based on mined data. Investor purchase price relative to current market price and mentions of key works within filing - “undervalued” or “attractive investment” mentioned in the Purpose of Transaction). Example screenshot in Figure 4
Following the disclosure Janus has gone on to rise 50% as of December 31, 2020 from the last purchase price in the 13D filing:
One might be curious about what other active investments Trian has recently made 13D filings for. With database search we can look that up:
The results show that Trian made another filing on the same day for Invesco Ltd. In the Purpose of Transaction sections of both filings Trian mentions conversations with company management and Trian’s intention to discuss strategic combinations such as mergers, acquisitions or consolidations. Fueling speculation on Wall Street that Trian will be pushing the two companies to merge. Invesco’s share price performance following the filing has been similarly positive in the subsequent 2 months.