Is Modine Manufacturing Co. (NYSE:MOD) undervalued? Prominent investors are turning less bullish. The number of long hedge fund positions were cut by 1 in recent months.
In the eyes of most market participants, hedge funds are seen as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the aristocrats of this group, close to 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total capital, and by keeping an eye on their best equity investments, we have unsheathed a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as important, positive insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are plenty of motivations for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, let’s take a look at the latest action regarding Modine Manufacturing Co. (NYSE:MOD).
How have hedgies been trading Modine Manufacturing Co. (NYSE:MOD)?
In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of -14% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Mario Gabelli’s GAMCO Investors had the biggest position in Modine Manufacturing Co. (NYSE:MOD), worth close to $19.7 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $2.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
Since Modine Manufacturing Co. (NYSE:MOD) has witnessed a declination in interest from the smart money, logic holds that there were a few money managers that slashed their full holdings last quarter. At the top of the heap, D. E. Shaw’s D E Shaw cut the biggest investment of the “upper crust” of funds we watch, worth about $0.2 million in stock. These moves are important to note, as total hedge fund interest dropped by 1 funds last quarter.
Insider trading activity in Modine Manufacturing Co. (NYSE:MOD)
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time frame, Modine Manufacturing Co. (NYSE:MOD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Modine Manufacturing Co. (NYSE:MOD). These stocks are Remy International Inc (NASDAQ:REMY), Fuel Systems Solutions, Inc. (NASDAQ:FSYS), Gentherm Inc (NASDAQ:THRM), Superior Industries International Inc. (NYSE:SUP), and Meritor Inc (NYSE:MTOR). This group of stocks belong to the auto parts industry and their market caps resemble MOD’s market cap.