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Do Hedge Funds and Insiders Love H&E Equipment Services, Inc. (HEES)?

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H&E Equipment Services, Inc. (NASDAQ:HEES) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. HEES has experienced a decrease in enthusiasm from smart money in recent months. There were 9 hedge funds in our database with HEES holdings at the end of the previous quarter.

If you’d ask most shareholders, hedge funds are viewed as unimportant, old financial tools of the past. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the bigwigs of this club, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total asset base, and by monitoring their highest performing equity investments, we have spotted a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Richard Driehaus

Just as key, positive insider trading sentiment is a second way to parse down the investments you’re interested in. Obviously, there are a number of reasons for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if shareholders know where to look (learn more here).

Now, we’re going to take a peek at the key action regarding H&E Equipment Services, Inc. (NASDAQ:HEES).

How have hedgies been trading H&E Equipment Services, Inc. (NASDAQ:HEES)?

Heading into 2013, a total of 9 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, Impala Asset Management, managed by Robert Bishop, holds the biggest position in H&E Equipment Services, Inc. (NASDAQ:HEES). Impala Asset Management has a $2.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $2.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Phil Frohlich’s Prescott Group Capital Management.

Because H&E Equipment Services, Inc. (NASDAQ:HEES) has experienced bearish sentiment from the smart money, we can see that there lies a certain “tier” of funds who were dropping their full holdings in Q4. Interestingly, Richard Schimel’s Diamondback Capital cut the largest position of all the hedgies we track, comprising about $0.1 million in stock. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about H&E Equipment Services, Inc. (NASDAQ:HEES)?

Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time period, H&E Equipment Services, Inc. (NASDAQ:HEES) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to H&E Equipment Services, Inc. (NASDAQ:HEES). These stocks are EnPro Industries, Inc. (NYSE:NPO), Mueller Water Products, Inc. (NYSE:MWA), Sun Hydraulics Corporation (NASDAQ:SNHY), CIRCOR International, Inc. (NYSE:CIR), and Standex Int’l Corp. (NYSE:SXI). This group of stocks are the members of the industrial equipment & components industry and their market caps are closest to HEES’s market cap.

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