Is HB Fuller Co (NYSE:FUL) a good investment today? Money managers are taking a pessimistic view. The number of long hedge fund positions were trimmed by 3 recently.
In the eyes of most investors, hedge funds are viewed as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the bigwigs of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total capital, and by paying attention to their highest performing picks, we have figured out a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as key, optimistic insider trading activity is another way to break down the financial markets. As the old adage goes: there are many stimuli for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this method if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a glance at the recent action encompassing HB Fuller Co (NYSE:FUL).
What have hedge funds been doing with HB Fuller Co (NYSE:FUL)?
At the end of the fourth quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -25% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.
Of the funds we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in HB Fuller Co (NYSE:FUL), worth close to $63.2 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Jeffrey Vinik of Vinik Asset Management, with a $23.7 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Donald Chiboucis’s Columbus Circle Investors, Mario Gabelli’s GAMCO Investors and Chuck Royce’s Royce & Associates.
What do corporate executives and insiders think about HB Fuller Co (NYSE:FUL)?
Insider buying is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest 180-day time frame, HB Fuller Co (NYSE:FUL) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to HB Fuller Co (NYSE:FUL). These stocks are Cabot Corp (NYSE:CBT), Kronos Worldwide, Inc. (NYSE:KRO), Chemtura Corp (NYSE:CHMT), Olin Corporation (NYSE:OLN), and Sensient Technologies Corporation (NYSE:SXT). All of these stocks are in the specialty chemicals industry and their market caps are closest to FUL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Cabot Corp (NYSE:CBT) | 13 | 0 | 2 |
| Kronos Worldwide, Inc. (NYSE:KRO) | 4 | 2 | 1 |
| Chemtura Corp (NYSE:CHMT) | 25 | 2 | 0 |
| Olin Corporation (NYSE:OLN) | 14 | 1 | 4 |
| Sensient Technologies Corporation (NYSE:SXT) | 10 | 0 | 4 |
With the results shown by our strategies, everyday investors must always monitor hedge fund and insider trading activity, and HB Fuller Co (NYSE:FUL) applies perfectly to this mantra.
