In the eyes of many of your fellow readers, hedge funds are seen as useless, old financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds trading today, Insider Monkey focuses on the upper echelon of this group, about 525 funds. It is assumed that this group controls the lion's share of the smart money's total assets, and by watching their highest performing investments, we've brought to light a few investment strategies that have historically outperformed 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as crucial, optimistic insider trading activity is another way to look at the financial markets. Just as you'd expect, there are plenty of motivations for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
Thus, it's important to examine the recent info for Manitowoc Company, Inc. (NYSE:MTW).
In preparation for the third quarter, a total of 15 of the hedge funds we track were long in this stock, a change of -35% from the first quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly.
According to our 13F database, James Dinan's York Capital Management had the most valuable position in Manitowoc Company, Inc. (NYSE:MTW), worth close to $88.6 million, comprising 1.8% of its total 13F portfolio. Sitting at the No. 2 spot is Xerion, managed by Daniel Arbess, which held a $27.9 million position; 1.9% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Dmitry Balyasny's Balyasny Asset Management, Crispin Odey's Odey Asset Management Group and Phill Gross and Robert Atchinson's Adage Capital Management.
Judging by the fact that Manitowoc Company, Inc. (NYSE:MTW) has witnessed bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there exists a select few hedge funds that decided to sell off their positions entirely last quarter. Interestingly, Sean Cullinan's Point State Capital sold off the largest position of the 450+ funds we monitor, totaling about $44.7 million in stock, and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund said goodbye to about $21 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 8 funds last quarter.
Insider buying made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time frame, Manitowoc Company, Inc. (NYSE:MTW) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Manitowoc Company, Inc. (NYSE:MTW). These stocks are Astec Industries, Inc. (NASDAQ:ASTE), Lindsay Corporation (NYSE:LNN), Joy Global Inc. (NYSE:JOY), AGCO Corporation (NYSE:AGCO), and Terex Corporation (NYSE:TEX). This group of stocks belong to the farm & construction machinery industry and their market caps are similar to MTW's market cap.