Is Dresser-Rand Group Inc. (NYSE:DRC) a worthy investment today? Investors who are in the know are selling. The number of long hedge fund bets decreased by 2 in recent months.
To the average investor, there are dozens of indicators investors can use to watch publicly traded companies. Some of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outclass their index-focused peers by a very impressive amount (see just how much).
Equally as beneficial, positive insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are plenty of motivations for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).
Now, it’s important to take a look at the latest action regarding Dresser-Rand Group Inc. (NYSE:DRC).
What does the smart money think about Dresser-Rand Group Inc. (NYSE:DRC)?
At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of -18% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the most valuable position in Dresser-Rand Group Inc. (NYSE:DRC). Iridian Asset Management has a $211.8 million position in the stock, comprising 3.5% of its 13F portfolio. Coming in second is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $58.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jean-Marie Eveillard’s First Eagle Investment Management, John A. Levin’s Levin Capital Strategies and Charles Clough’s Clough Capital Partners.
Because Dresser-Rand Group Inc. (NYSE:DRC) has witnessed declining sentiment from hedge fund managers, logic holds that there were a few money managers that slashed their positions entirely heading into 2013. It’s worth mentioning that SAC Subsidiary’s Sigma Capital Management sold off the largest stake of the 450+ funds we watch, comprising about $4.9 million in stock.. Jacob Gottlieb’s fund, Visium Asset Management, also said goodbye to its stock, about $1.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into 2013.
What do corporate executives and insiders think about Dresser-Rand Group Inc. (NYSE:DRC)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time frame, Dresser-Rand Group Inc. (NYSE:DRC) has seen 1 unique insiders buying, and 7 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 Dresser-Rand Group Inc. (NYSE:DRC). These stocks are Nordson Corporation (NASDAQ:NDSN), Xylem Inc (NYSE:XYL), Avery Dennison Corp (NYSE:AVY), Colfax Corp (NYSE:CFX), and IDEX Corporation (NYSE:IEX). This group of stocks are the members of the diversified machinery industry and their market caps match DRC’s market cap.