Emerson Electric Co. (NYSE:EMR) was in 29 hedge funds’ portfolio at the end of the fourth quarter of 2012. EMR has seen an increase in activity from the world’s largest hedge funds in recent months. There were 27 hedge funds in our database with EMR positions at the end of the previous quarter.
According to most market participants, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are over 8000 funds trading at the moment, we at Insider Monkey choose to focus on the elite of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their highest performing investments, we have deciphered a few investment strategies that have historically outstripped the market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as key, optimistic insider trading sentiment is a second way to parse down the marketplace. Obviously, there are plenty of reasons for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the key action regarding Emerson Electric Co. (NYSE:EMR).
What have hedge funds been doing with Emerson Electric Co. (NYSE:EMR)?
At year’s end, a total of 29 of the hedge funds we track were bullish in this stock, a change of 7% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Legg Mason Capital Management, managed by Bill Miller, holds the largest position in Emerson Electric Co. (NYSE:EMR). Legg Mason Capital Management has a $69 million position in the stock, comprising 1.2% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $34 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Michael Messner’s Seminole Capital (Investment Mgmt), Ricky Sandler’s Eminence Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Seminole Capital (Investment Mgmt), managed by Michael Messner, created the most valuable position in Emerson Electric Co. (NYSE:EMR). Seminole Capital (Investment Mgmt) had 33 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also made a $32 million investment in the stock during the quarter. The other funds with brand new EMR positions are Phill Gross and Robert Atchinson’s Adage Capital Management, Daniel S. Och’s OZ Management, and Anil Stevens and Glenn Shapiro’s Parameter Capital Management.
How are insiders trading Emerson Electric Co. (NYSE:EMR)?
Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time frame, Emerson Electric Co. (NYSE:EMR) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the returns exhibited by our tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Emerson Electric Co. (NYSE:EMR) shareholders fit into this picture quite nicely.
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