A. O. Smith Corporation (AOS): Insiders Are Dumping, Should You? – Belden Inc. (BDC), Woodward Inc (WWD)

Page 1 of 2

A. O. Smith Corporation (NYSE:AOS) investors should pay attention to a decrease in hedge fund sentiment of late.

A. O. Smith Corporation (NYSE:AOS)

If you’d ask most traders, hedge funds are seen as slow, outdated financial vehicles of the past. While there are greater than 8000 funds trading at present, we choose to focus on the bigwigs of this group, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by paying attention to their best equity investments, we have figured out a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as integral, positive insider trading sentiment is a second way to parse down the marketplace. There are many motivations for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).

Consequently, it’s important to take a look at the recent action surrounding A. O. Smith Corporation (NYSE:AOS).

What have hedge funds been doing with A. O. Smith Corporation (NYSE:AOS)?

In preparation for this year, a total of 9 of the hedge funds we track were bullish in this stock, a change of -36% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the biggest position in A. O. Smith Corporation (NYSE:AOS), worth close to $40 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $31 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that hold long positions include Cliff Asness’s AQR Capital Management, Andrew Sandler’s Sandler Capital Management and Israel Englander’s Millennium Management.

Because A. O. Smith Corporation (NYSE:AOS) has witnessed falling interest from hedge fund managers, it’s easy to see that there exists a select few hedge funds who sold off their positions entirely at the end of the year. Interestingly, Phill Gross and Robert Atchinson’s Adage Capital Management said goodbye to the biggest investment of the “upper crust” of funds we monitor, valued at an estimated $19 million in stock.. David Costen Haley’s fund, HBK Investments, also said goodbye to its stock, about $6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds at the end of the year.

What have insiders been doing with A. O. Smith Corporation (NYSE:AOS)?

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, A. O. Smith Corporation (NYSE:AOS) has experienced zero unique insiders purchasing, and 13 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to A. O. Smith Corporation (NYSE:AOS). These stocks are General Cable Corporation (NYSE:BGC), EnerSys (NYSE:ENS), Belden Inc. (NYSE:BDC), Woodward Inc (NASDAQ:WWD), and REGAL-BELOIT CORPORATION (NYSE:RBC). This group of stocks are the members of the industrial electrical equipment industry and their market caps are similar to AOS’s market cap.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!