In the 21st century investor’s toolkit, there are dozens of metrics investors can use to analyze publicly traded companies. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass their index-focused peers by a significant margin (see just how much).
Just as crucial, positive insider trading activity is a second way to analyze the investments you're interested in. Just as you'd expect, there are many stimuli for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).
Furthermore, let's examine the latest info about LKQ Corporation (NASDAQ:LKQ).
Heading into Q3, a total of 21 of the hedge funds we track held long positions in this stock, a change of 11% from the first quarter. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly.
With a general bullishness amongst the titans, certain money managers have been driving this bullishness. Cantillon Capital Management, managed by William von Mueffling, created the largest position in LKQ Corporation (NASDAQ:LKQ). Cantillon Capital Management had 187.3 million invested in the company at the end of the quarter. James Crichton and Adam Weiss's Scout Capital Management also made a $109.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Richard Chilton's Chilton Investment Company, Ian Simm's Impax Asset Management, and Greg Poole's Echo Street Capital Management.
Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the last half-year time period, LKQ Corporation (NASDAQ:LKQ) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to LKQ Corporation (NASDAQ:LKQ). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), BorgWarner Inc. (NYSE:BWA), Lear Corporation (NYSE:LEA), Autoliv Inc. (NYSE:ALV), and TRW Automotive Holdings Corp. (NYSE:TRW). This group of stocks are the members of the auto parts industry and their market caps resemble LKQ's market cap.