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Briggs & Stratton Corporation (BGG): Are Hedge Funds Right About This Stock?

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Is it smart to be bullish on Briggs & Stratton Corporation (NYSE:BGG)?

To many investors, hedge funds are seen as bloated, old financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds trading today, Insider Monkey aim at the masters of this club, close to 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by paying attention to their highest performing picks, we’ve found a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as necessary, positive insider trading sentiment is another way to look at the financial markets. There are plenty of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if you understand where to look (learn more here).

Keeping this in mind, it’s important to analyze the newest info for Briggs & Stratton Corporation (NYSE:BGG).

What does the smart money think about Briggs & Stratton Corporation (NYSE:BGG)?

At the end of the second quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 67% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.

Briggs & Stratton Corporation (NYSE:BGG)According to our 13F database, Crispin Odey’s Odey Asset Management Group had the biggest position in Briggs & Stratton Corporation (NYSE:BGG), worth close to $18.5 million, accounting for 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $12.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.

Consequently, particular hedge funds were leading the bulls’ herd. Odey Asset Management Group, managed by Crispin Odey, created the most valuable position in Briggs & Stratton Corporation (NYSE:BGG). Odey Asset Management Group had 18.5 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also made a $12.7 million investment in the stock during the quarter. The following funds were also among the new BGG investors: David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.

How are insiders trading Briggs & Stratton Corporation (NYSE:BGG)?

Legal insider trading, particularly when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, Briggs & Stratton Corporation (NYSE:BGG) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Briggs & Stratton Corporation (NYSE:BGG). These stocks are Luxfer Holdings PLC (ADR) (NYSE:LXFR), Hillenbrand, Inc. (NYSE:HI), Edwards Group Ltd (NASDAQ:EVAC), AIXTRON SE (ADR) (NASDAQ:AIXG), and MKS Instruments, Inc. (NASDAQ:MKSI). All of these stocks are in the diversified machinery industry and their market caps match BGG’s market cap.

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