Matthews International Corp (NASDAQ:MATW) has experienced a decrease in support from the world’s most elite money managers in recent months.
If you’d ask most investors, hedge funds are assumed to be slow, old investment tools of the past. While there are greater than 8000 funds trading at present, we choose to focus on the moguls of this club, close to 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total capital, and by paying attention to their highest performing picks, we have spotted 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 per year 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 outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as integral, positive insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are many incentives for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if you understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the latest action regarding Matthews International Corp (NASDAQ:MATW).
How have hedgies been trading Matthews International Corp (NASDAQ:MATW)?
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes significantly.
Of the funds we track, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Matthews International Corp (NASDAQ:MATW). Pzena Investment Management has a $16 million position in the stock, comprising 0.1% of its 13F portfolio. On Pzena Investment Management’s heels is Ariel Investments, managed by John W. Rogers, which held a $10 million position; 0% of its 13F portfolio is allocated to the stock. Other peers that are bullish include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Because Matthews International Corp (NASDAQ:MATW) has witnessed falling interest from hedge fund managers, we can see that there was a specific group of funds that elected to cut their entire stakes last quarter. It’s worth mentioning that Israel Englander’s Millennium Management cut the biggest stake of the 450+ funds we watch, comprising about $1 million in stock.. Cliff Asness’s fund, AQR Capital Management, also said goodbye to its stock, about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Matthews International Corp (NASDAQ:MATW)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time frame, Matthews International Corp (NASDAQ:MATW) has seen zero unique insiders buying, and zero 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 Matthews International Corp (NASDAQ:MATW). These stocks are Sims Metal Management Ltd (ADR) (NYSE:SMS), Mueller Industries, Inc. (NYSE:MLI), Haynes International, Inc. (NASDAQ:HAYN), Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), and AZZ Incorporated (NYSE:AZZ). All of these stocks are in the metal fabrication industry and their market caps match MATW’s market cap.