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Should You Avoid Parker-Hannifin Corporation (NYSE:PH)?

Parker-Hannifin Corporation (NYSE:PH) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. PH has experienced a decrease in support from the world’s most elite money managers of late. There were 19 hedge funds in our database with PH holdings at the end of the previous quarter.

Parker-Hannifin Corporation (NYSE:PH)

At the moment, there are tons of gauges market participants can use to monitor the equity markets. A pair of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the S&P 500 by a significant margin (see just how much).

Just as integral, bullish insider trading activity is a second way to parse down the financial markets. Just as you’d expect, there are a number of stimuli for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if you understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a peek at the key action regarding Parker-Hannifin Corporation (NYSE:PH).

What does the smart money think about Parker-Hannifin Corporation (NYSE:PH)?

At year’s end, a total of 16 of the hedge funds we track held long positions in this stock, a change of -16% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Ric Dillon’s Diamond Hill Capital had the largest position in Parker-Hannifin Corporation (NYSE:PH), worth close to $147 million, comprising 1.7% of its total 13F portfolio. Coming in second is Bill Miller of Legg Mason Capital Management, with a $77 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’s AQR Capital Management and David Harding’s Winton Capital Management.

Since Parker-Hannifin Corporation (NYSE:PH) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers who were dropping their entire stakes last quarter. Interestingly, Robert Bishop’s Impala Asset Management sold off the largest investment of the “upper crust” of funds we watch, totaling about $87 million in stock.. Jim Simons’s fund, Renaissance Technologies, also cut its stock, about $49 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.

Insider trading activity in Parker-Hannifin Corporation (NYSE:PH)

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last 180-day time period, Parker-Hannifin Corporation (NYSE:PH) has experienced zero unique insiders purchasing, and 18 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s tactics, retail investors should always watch hedge fund and insider trading activity, and Parker-Hannifin Corporation (NYSE:PH) is no exception.

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

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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