Alpha Investment Strategies for Individual Investors
Aggressive accumulation of a stock is often an indication that it has the potential for above-average – i.e., Alpha – performance. Whenever we detect evidence that a stock is being aggressively accumulated we email Signals with the details of that accumulation to our Members.
The efficacy of our Signals can easily be determined by reviewing the Top Ten Stocks and Weekly Summary charts for both Institutional Investors and Unusual Volume (listed under Performance to the left).
We track the SEC filings of more than 40 of the nation's largest institutional investment management firms and more than 40 of the nation's largest hedge funds. We specifically look for filings that reveal stocks that have the potential to increase the Alpha performance of these institutional investment firms.
Those same Alpha strategy stocks offer a rich source of investment ideas for individual investors and their advisors.
When institutional investment managers or hedge funds discover a stock that offers compelling potential for delivering Alpha performance they do what any savvy investor would do: They make an inordinately large investment in that stock.
Said differently, they make a Big Bet.
Usually that investment will entail acquiring 5% or more of the company’s stock. Once that 5% threshold has been passed, they must file an SC-13 report with the Securities and Exchange Commission (SEC).
When an institutional investment manager’s SC-13 filings involves an original or add-on investment of $100 million or more, we generate an Institutional Investor Signal. When a hedge fund’s SC-13 filings involves an original or add-on investment of $25 million or more, we also generate an Institutional Investor Signal.
As a supplement to our Big Bet Signals, we also track Unusual Volume for both NYSE and Nasdaq stocks. When a stock experiences Unusual Volume (typically at least double the normal daily volume) and closes at a price higher than the previous day’s close for 3 out of 5 consecutive days, we generate an Unusual Volume Signal.
The Institutional Investor Signals are e-mailed to Members, usually within hours from the time the original filings are received by the SEC. The Unusual Volume Signals are also emailed to Members, usually within 5-6 hours after the markets close.
At the end of every week the trailing 12-month performance of the Top Ten Signals is posted on the Home page of our web site. At the end of every week we also post a Weekly Summary which displays the trailing 12-month performance of the Signals for each of the most recent 10-weeks.
When viewing the Weekly Summaries, the variance between our two Signal categories (Top 50 and All Signals) and the year-over-year performance of the S&P 500 measures the Alpha performance of the Institutional Investor and Unusual Volume Signals - the extent to which they lead or lag the S&P 500.
