Across the globe, there are now dozens of fund managers that can put billions of dollars into play. These folks made their fortunes and reputations when their asset base was much smaller. They often targeted small, unknown companies and were able to double or even triple their money.
Yet as their asset base has grown, they can't go after small game anymore. Even if successful, a small investment can never really move the needle. So these same money managers, Warren Buffett included, are now hunting much larger prey.
Over the years, I've been tracking insider buying and noticed that the buying lists are no longer dominated by company executives but instead by these big-time fund managers that build major positions in a stock. (Once they own 5% of company stock, they must file each subsequent transaction with the SEC.)
What are these big-game hunters up to? And more important, can you make money by riding herd with them?
The answer is a qualified yes.
Carl Icahn may be considered to be one of the most aggressive practitioners of big-game hunting. He made a killing in 2008 when his $400 million in investment in biotech firm Imclone Systems turned into a $700 million stake when Bristol-Myers Squibb announced plans to buy the company.
But not every move works out. When Icahn offered to buy Clorox (NYSE: CLX) in July 2011 for $80 a share, he found little interest from the company. A few months later, he walked away.
Yet there are clear examples where you can profit by riding herd with these big investors. Here are three opportunities I'm watching...
1. Cerberus Capital
GeoEye (Nasdaq: GEOY)