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Here is What Hedge Funds Think About The Toro Company (TTC): The Eastern Company (EML), Makita Corporation (ADR) (MKTAY)

The Toro Company (NYSE:TTC) investors should pay attention to a decrease in enthusiasm from smart money recently.

The Toro Company (NYSE:TTC)In the eyes of most investors, hedge funds are assumed to be unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we hone in on the masters of this club, close to 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total asset base, and by tracking their highest performing picks, we have found a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see all of our picks from August).

Equally as integral, optimistic insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are a variety of incentives for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).

With these “truths” under our belt, it’s important to take a gander at the latest action encompassing The Toro Company (NYSE:TTC).

What have hedge funds been doing with The Toro Company (NYSE:TTC)?

In preparation for this year, a total of 13 of the hedge funds we track held long positions in this stock, a change of -35% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the largest position in The Toro Company (NYSE:TTC), worth close to $39 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $28 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Steven Cohen’s SAC Capital Advisors and Ric Dillon’s Diamond Hill Capital.

Seeing as The Toro Company (NYSE:TTC) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there is a sect of fund managers who were dropping their entire stakes at the end of the year. Interestingly, David Costen Haley’s HBK Investments cut the largest position of all the hedgies we key on, totaling an estimated $1 million in stock.. Mike Vranos’s fund, Ellington, also dumped its stock, about $1 million worth. These moves are interesting, as total hedge fund interest was cut by 7 funds at the end of the year.

How have insiders been trading The Toro Company (NYSE:TTC)?

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, The Toro Company (NYSE:TTC) has experienced 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to The Toro Company (NYSE:TTC). These stocks are The Eastern Company (NASDAQ:EML), Makita Corporation (ADR) (NASDAQ:MKTAY), Snap-on Incorporated (NYSE:SNA), Simpson Manufacturing Co, Inc. (NYSE:SSD), and Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This group of stocks are in the small tools & accessories industry and their market caps are closest to TTC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The Eastern Company (NASDAQ:EML) 3 0 0
Makita Corporation (ADR) (NASDAQ:MKTAY) 1 0 0
Snap-on Incorporated (NYSE:SNA) 19 0 8
Simpson Manufacturing Co, Inc. (NYSE:SSD) 6 0 1
Lincoln Electric Holdings, Inc. (NASDAQ:LECO) 11 0 10

With the results exhibited by Insider Monkey’s strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and The Toro Company (NYSE:TTC) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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