REGAL-BELOIT CORPORATION (NYSE:RBC) investors should pay attention to an increase in hedge fund sentiment lately.
In the eyes of most stock holders, hedge funds are perceived as unimportant, old investment tools of the past. While there are over 8000 funds trading at the moment, we hone in on the masters of this club, about 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top investments, we have come up with a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, bullish insider trading activity is a second way to parse down the investments you’re interested in. There are lots of stimuli for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).
With these “truths” under our belt, we’re going to take a peek at the latest action surrounding REGAL-BELOIT CORPORATION (NYSE:RBC).
Hedge fund activity in REGAL-BELOIT CORPORATION (NYSE:RBC)
In preparation for this year, a total of 14 of the hedge funds we track were long in this stock, a change of 75% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in REGAL-BELOIT CORPORATION (NYSE:RBC), worth close to $71 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $42 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Ken Fisher’s Fisher Asset Management, Malcolm Fairbairn’s Ascend Capital and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, key hedge funds were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the most outsized position in REGAL-BELOIT CORPORATION (NYSE:RBC). Adage Capital Management had 42 million invested in the company at the end of the quarter. Malcolm Fairbairn’s Ascend Capital also made a $10 million investment in the stock during the quarter. The other funds with brand new RBC positions are Ken Griffin’s Citadel Investment Group, Alec Litowitz and Ross Laser’s Magnetar Capital, and Bruce Kovner’s Caxton Associates LP.
What do corporate executives and insiders think about REGAL-BELOIT CORPORATION (NYSE:RBC)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, REGAL-BELOIT CORPORATION (NYSE:RBC) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to REGAL-BELOIT CORPORATION (NYSE:RBC). These stocks are A. O. Smith Corporation (NYSE:AOS), Woodward Inc (NASDAQ:WWD), Belden Inc. (NYSE:BDC), EnerSys (NYSE:ENS), and General Cable Corporation (NYSE:BGC). This group of stocks are in the industrial electrical equipment industry and their market caps resemble RBC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|A. O. Smith Corporation (NYSE:AOS)||9||0||13|
|Woodward Inc (NASDAQ:WWD)||8||1||4|
|Belden Inc. (NYSE:BDC)||13||2||5|
|General Cable Corporation (NYSE:BGC)||20||0||4|
With the returns demonstrated by Insider Monkey’s time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and REGAL-BELOIT CORPORATION (NYSE:RBC) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.