Babcock & Wilcox Co (NYSE:BWC) was in 15 hedge funds’ portfolio at the end of December. BWC shareholders have witnessed a decrease in enthusiasm from smart money lately. There were 18 hedge funds in our database with BWC holdings at the end of the previous quarter. We’ll also see how it stacks up against peers like 3D Systems Corporation (NYSE:DDD) and The Middleby Corporation (NASDAQ:MIDD).
In the 21st century investor’s toolkit, there are many indicators investors can use to track their holdings. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outclass the market by a significant amount (see just how much).
Just as integral, positive insider trading sentiment is a second way to parse down the world of equities. Obviously, there are a number of motivations for an insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
Consequently, let’s take a gander at the latest action regarding Babcock & Wilcox Co (NYSE:BWC).
How have hedgies been trading Babcock & Wilcox Co (NYSE:BWC)?
At the end of the fourth quarter, a total of 15 of the hedge funds we track were long in this stock, a change of -17% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Kenneth Mario Garschina’s Mason Capital Management had the most valuable position in Babcock & Wilcox Co (NYSE:BWC), worth close to $385 million, accounting for 5.5% of its total 13F portfolio. Sitting at the No. 2 spot is Glenview Capital, managed by Larry Robbins, which held a $145 million position; 0% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include David Einhorn’s Greenlight Capital, Anthony Bozza’s Lakewood Capital Management and D. E. Shaw’s D E Shaw.
Seeing as Babcock & Wilcox Co (NYSE:BWC) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies who sold off their entire stakes heading into 2013. Interestingly, Steven Cohen’s SAC Capital Advisors sold off the biggest position of the 450+ funds we watch, worth an estimated $14 million in stock.. Bill Miller’s fund, Legg Mason Capital Management, also cut its stock, about $11 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds heading into 2013.
What do corporate executives and insiders think about Babcock & Wilcox Co (NYSE:BWC)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time frame, Babcock & Wilcox Co (NYSE:BWC) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Babcock & Wilcox Co (NYSE:BWC). These stocks are Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), Graco Inc. (NYSE:GGG), 3D Systems Corporation (NYSE:DDD), and The Middleby Corporation (NASDAQ:MIDD). This group of stocks belong to the diversified machinery industry and their market caps are similar to BWC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Crane Co. (NYSE:CR)||19||0||9|
|Lennox International Inc. (NYSE:LII)||15||0||11|
|Graco Inc. (NYSE:GGG)||11||0||9|
|3D Systems Corporation (NYSE:DDD)||8||1||3|
|The Middleby Corporation (NASDAQ:MIDD)||15||0||2|
With the returns shown by the aforementioned strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Babcock & Wilcox Co (NYSE:BWC) applies perfectly to this mantra.
Related tickers: Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), Graco Inc. (NYSE:GGG), 3D Systems Corporation (NYSE:DDD), The Middleby Corporation (NASDAQ:MIDD), Babcock & Wilcox Co (NYSE:BWC)