Is it smart to be bullish on Tempur-Pedic International Inc. (NYSE:TPX)?
At the moment, there are dozens of metrics investors can use to monitor stocks. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can trounce the S&P 500 by a solid margin (see just how much).
Equally as key, optimistic insider trading activity is a second way to analyze the marketplace. There are plenty of reasons for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this tactic if "monkeys" know what to do (learn more here).
Thus, we're going to analyze the newest info surrounding Tempur-Pedic International Inc. (NYSE:TPX).
In preparation for the third quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of 5% from the previous quarter. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds we follow, John Shapiro's Chieftain Capital had the most valuable position in Tempur-Pedic International Inc. (NYSE:TPX), worth close to $243.7 million, comprising 16.4% of its total 13F portfolio. The second largest stake is held by Rehan Jaffer of H Partners Management, with a $229.5 million position; 17.2% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Doug Silverman and Alexander Klabin's Senator Investment Group, Steven Cohen's SAC Capital Advisors and Ken Griffin's Citadel Investment Group.
Now, specific money managers have been driving this bullishness. Chieftain Capital, managed by John Shapiro, established the most valuable position in Tempur-Pedic International Inc. (NYSE:TPX). Chieftain Capital had 243.7 million invested in the company at the end of the quarter. Rehan Jaffer's H Partners Management also made a $229.5 million investment in the stock during the quarter. The following funds were also among the new TPX investors: Doug Silverman and Alexander Klabin's Senator Investment Group, Steven Cohen's SAC Capital Advisors, and Ken Griffin's Citadel Investment Group.
Bullish insider trading is best served when the company in question has seen transactions within the past half-year. Over the last half-year time frame, Tempur-Pedic International Inc. (NYSE:TPX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Tempur-Pedic International Inc. (NYSE:TPX). These stocks are La-Z-Boy Incorporated (NYSE:LZB), Select Comfort Corp. (NASDAQ:SCSS), Mattress Firm Holding Corp (NASDAQ:MFRM), Fortune Brands Home & Security Inc (NYSE:FBHS), and Leggett & Platt, Inc. (NYSE:LEG). This group of stocks belong to the home furnishings & fixtures industry and their market caps match TPX's market cap.