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Do Hedge Funds and Insiders Love Chicago Bridge & Iron Company N.V. (CBI)?

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To many traders, hedge funds are perceived as delayed, old investment tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, this site aim at the moguls of this group, around 525 funds. It is widely held that this group controls most of the hedge fund industry’s total assets, and by paying attention to their highest performing picks, we’ve come up with a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to 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 the details here).

Just as useful, positive insider trading sentiment is a second way to analyze the stock market universe. Just as you’d expect, there are lots of stimuli for an executive to drop shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if you understand where to look (learn more here).

Keeping this in mind, we’re going to examine the latest info for Chicago Bridge & Iron Company N.V. (NYSE:CBI).

Chicago Bridge & Iron Company N.V. (NYSE:CBI)

How are hedge funds trading Chicago Bridge & Iron Company N.V. (NYSE:CBI)?

At the end of the second quarter, a total of 32 of the hedge funds we track were long in this stock, a change of -22% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly.

According to our 13F database, Warren Buffett’s Berkshire Hathaway had the largest position in Chicago Bridge & Iron Company N.V. (NYSE:CBI), worth close to $569.8 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Balyasny Asset Management, managed by Dmitry Balyasny, which held a $183.7 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Robert Pitts’s Steadfast Capital Management, D. E. Shaw’s D E Shaw and David Tepper’s Appaloosa Management LP.

Judging by the fact that Chicago Bridge & Iron Company N.V. (NYSE:CBI) has experienced a fall in interest from the smart money’s best and brightest, it’s safe to say that there is a sect of money managers that elected to cut their full holdings in Q1. At the top of the heap, Alexander Mitchell’s Scopus Asset Management sold off the biggest investment of all the hedgies we key on, totaling about $43.3 million in call options., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dumped about $10.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 9 funds in Q1.

What have insiders been doing with Chicago Bridge & Iron Company N.V. (NYSE:CBI)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Chicago Bridge & Iron Company N.V. (NYSE:CBI) has experienced zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Chicago Bridge & Iron Company N.V. (NYSE:CBI). These stocks are Pike Electric Corporation (NYSE:PIKE), MYR Group Inc (NASDAQ:MYRG), Comfort Systems USA, Inc. (NYSE:FIX), Emcor Group Inc (NYSE:EME), and Quanta Services Inc (NYSE:PWR). This group of stocks belong to the general contractors industry and their market caps match CBI’s market cap.

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