Is Powell Industries, Inc. (NASDAQ:POWL) the right pick for your portfolio? The best stock pickers are turning bullish. The number of long hedge fund bets moved up by 3 recently.
To most shareholders, hedge funds are viewed as underperforming, old investment tools of the past. While there are more than 8000 funds in operation today, we hone in on the leaders of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by tracking their highest performing picks, we have identified a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as key, bullish insider trading activity is another way to parse down the investments you’re interested in. As the old adage goes: there are lots of stimuli for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
With these “truths” under our belt, it’s important to take a gander at the key action regarding Powell Industries, Inc. (NASDAQ:POWL).
What does the smart money think about Powell Industries, Inc. (NASDAQ:POWL)?
At the end of the first quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 43% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Powell Industries, Inc. (NASDAQ:POWL). Royce & Associates has a $51 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which held a $3.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Richard S. Meisenberg’s ACK Asset Management, Jim Simons’s Renaissance Technologies and Richard Driehaus’s Driehaus Capital.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most outsized position in Powell Industries, Inc. (NASDAQ:POWL). Millennium Management had 3.9 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $1.5 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Matthew Hulsizer’s PEAK6 Capital Management, and D. E. Shaw’s D E Shaw.
How have insiders been trading Powell Industries, Inc. (NASDAQ:POWL)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Powell Industries, Inc. (NASDAQ:POWL) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Powell Industries, Inc. (NASDAQ:POWL). These stocks are GrafTech International Ltd (NYSE:GTI), Zoltek Companies, Inc. (NASDAQ:ZOLT), Daktronics, Inc. (NASDAQ:DAKT), Altra Holdings, Inc. (NASDAQ:AIMC), and Hollysys Automation Technologies Ltd (NASDAQ:HOLI). This group of stocks belong to the industrial electrical equipment industry and their market caps are similar to POWL’s market cap.