Is Steinway Musical Instruments Inc (NYSE:LVB) a first-rate investment now? Hedge funds are taking a pessimistic view. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the eyes of most shareholders, hedge funds are seen as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds trading today, we hone in on the moguls of this club, around 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total capital, and by monitoring their top picks, we have identified a number of investment strategies that have historically outpaced the S&P 500 index. 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 started 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 (explore the details and some picks here).
Just as integral, positive insider trading activity is another way to parse down the world of equities. Just as you’d expect, there are a number of reasons for a bullish 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 useful potential of this strategy if shareholders know what to do (learn more here).
With these “truths” under our belt, let’s take a gander at the recent action surrounding Steinway Musical Instruments Inc (NYSE:LVB).
What have hedge funds been doing with Steinway Musical Instruments Inc (NYSE:LVB)?
Heading into Q2, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Steinway Musical Instruments Inc (NYSE:LVB). Royce & Associates has a $11.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Cardinal Capital, managed by Amy Minella, which held a $6.3 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.
Seeing as Steinway Musical Instruments Inc (NYSE:LVB) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that decided to sell off their full holdings heading into Q2. It’s worth mentioning that Jean-Marie Eveillard’s First Eagle Investment Management dropped the biggest investment of all the hedgies we key on, valued at an estimated $1 million in stock. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Steinway Musical Instruments Inc (NYSE:LVB)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest six-month time period, Steinway Musical Instruments Inc (NYSE:LVB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results exhibited by our studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Steinway Musical Instruments Inc (NYSE:LVB) is no exception.