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Hedge Funds Are Crazy About Tenneco Inc (TEN)

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Tenneco Inc (NYSE:TEN) has experienced an increase in hedge fund sentiment in recent months.

In the eyes of most traders, hedge funds are perceived as underperforming, old investment vehicles of years past. While there are over 8000 funds with their doors open today, we at Insider Monkey hone in on the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total asset base, and by watching their best picks, we have unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 (see all of our picks from August).

Tenneco Inc (NYSE:TEN)

Equally as beneficial, positive insider trading activity is another way to break down the financial markets. Just as you’d expect, there are lots of stimuli for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Now, we’re going to take a gander at the recent action regarding Tenneco Inc (NYSE:TEN).

Hedge fund activity in Tenneco Inc (NYSE:TEN)

At the end of the first quarter, a total of 24 of the hedge funds we track held long positions in this stock, a change of 20% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, David Cohen and Harold Levy’s Iridian Asset Management had the biggest position in Tenneco Inc (NYSE:TEN), worth close to $60.2 million, comprising 0.9% of its total 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which held a $41.8 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that are bullish include Ric Dillon’s Diamond Hill Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.

As aggregate interest increased, some big names were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, assembled the biggest position in Tenneco Inc (NYSE:TEN). AQR Capital Management had 5.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $1.2 million investment in the stock during the quarter. The following funds were also among the new TEN investors: Mike Vranos’s Ellington, Joel Greenblatt’s Gotham Asset Management, and Andy Redleaf’s Whitebox Advisors.

What have insiders been doing with Tenneco Inc (NYSE:TEN)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, Tenneco Inc (NYSE:TEN) has experienced 1 unique insiders buying, and 11 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Tenneco Inc (NYSE:TEN). These stocks are Dorman Products Inc. (NASDAQ:DORM), Westport Innovations Inc. (USA) (NASDAQ:WPRT), Visteon Corp (NYSE:VC), Gentex Corporation (NASDAQ:GNTX), and Dana Holding Corporation (NYSE:DAN). This group of stocks are the members of the auto parts industry and their market caps resemble TEN’s market cap.

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