At the moment, there are tons of indicators shareholders can use to analyze publicly traded companies. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can beat the market by a healthy margin (see just how much).
Just as crucial, positive insider trading sentiment is a second way to look at the world of equities. As the old adage goes: there are lots of motivations for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
Keeping this in mind, it’s important to discuss the recent info surrounding Huntington Ingalls Industries Inc (NYSE:HII).
Hedge fund activity in Huntington Ingalls Industries Inc (NYSE:HII)
In preparation for the third quarter, a total of 18 of the hedge funds we track held long positions in this stock, a change of -10% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.
When using filings from the hedgies we track, Pennant Capital Management, managed by Alan Fournier, holds the biggest position in Huntington Ingalls Industries Inc (NYSE:HII). Pennant Capital Management has a $233.2 million position in the stock, comprising 4.3% of its 13F portfolio. On Pennant Capital Management’s heels is Southpoint Capital Advisors, managed by Rob Butts and Josh Clark, which held a $133.4 million position; the fund has 8.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Ryan Heslop and Ariel Warszawski’s Firefly Value Partners, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.
As Huntington Ingalls Industries Inc (NYSE:HII) has faced dropping sentiment from the smart money’s best and brightest, it’s safe to say that there was a specific group of fund managers that elected to cut their positions entirely at the end of the second quarter. At the top of the heap, Israel Englander’s Millennium Management dropped the largest stake of the “upper crust” of funds we track, comprising an estimated $1.7 million in stock. Mike Vranos’s fund, Ellington, also dumped its stock, about $1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds at the end of the second quarter.
What have insiders been doing with Huntington Ingalls Industries Inc (NYSE:HII)?
Legal insider trading, particularly when it’s bullish, is particularly usable when the company in question has seen transactions within the past six months. Over the last half-year time period, Huntington Ingalls Industries Inc (NYSE:HII) has seen zero unique insiders purchasing, 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 Huntington Ingalls Industries Inc (NYSE:HII). These stocks are Alliant Techsystems Inc. (NYSE:ATK), Teledyne Technologies Incorporated (NYSE:TDY), Hexcel Corporation (NYSE:HXL), CAE, Inc. (USA) (NYSE:CAE), and Spirit AeroSystems Holdings, Inc. (NYSE:SPR). This group of stocks are in the aerospace/defense products & services industry and their market caps match HII’s market cap.