Is Snap-on Incorporated (NYSE:SNA) going to take off soon? Investors who are in the know are in a pessimistic mood. The number of long hedge fund positions shrunk by 4 in recent months.
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Equally as beneficial, bullish insider trading activity is another way to break down the stock market universe. As the old adage goes: there are many motivations for an insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).
Now, it’s important to take a look at the key action regarding Snap-on Incorporated (NYSE:SNA).
How are hedge funds trading Snap-on Incorporated (NYSE:SNA)?
In preparation for this quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of -19% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Ariel Investments, managed by John W. Rogers, holds the largest position in Snap-on Incorporated (NYSE:SNA). Ariel Investments has a $109 million position in the stock, comprising 1.9% of its 13F portfolio. Coming in second is Jeffrey Gates of Gates Capital Management, with a $90.8 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Other peers that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, David Harding’s Winton Capital Management and Robert Joseph Caruso’s Select Equity Group.
Because Snap-on Incorporated (NYSE:SNA) has experienced a declination in interest from the aggregate hedge fund industry, logic holds that there were a few fund managers who sold off their positions entirely heading into Q2. Interestingly, Bruce Kovner’s Caxton Associates LP dumped the biggest position of the 450+ funds we track, valued at an estimated $2.4 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund cut about $1.5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 4 funds heading into Q2.
How are insiders trading Snap-on Incorporated (NYSE:SNA)?
Insider buying is particularly usable when the company in question has seen transactions within the past half-year. Over the last six-month time frame, Snap-on Incorporated (NYSE:SNA) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Snap-on Incorporated (NYSE:SNA). These stocks are The Eastern Company (NASDAQ:EML), Simpson Manufacturing Co, Inc. (NYSE:SSD), The Toro Company (NYSE:TTC), Makita Corporation (ADR) (NASDAQ:MKTAY), and Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This group of stocks belong to the small tools & accessories industry and their market caps are closest to SNA’s market cap.