Should You Avoid Standard Motor Products, Inc. (SMP)?

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Due to the fact that Standard Motor Products, Inc. (NYSE:SMP) has weathered a decline in interest from the smart money, it’s safe to say that there were a few fund managers that decided to sell off their full holdings heading into Q4. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors sold off the biggest position of all the investors watched by Insider Monkey, worth close to $0.8 million in stock, and Clinton Group was right behind this move, as the fund cut about $0.3 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Standard Motor Products, Inc. (NYSE:SMP) but similarly valued. These stocks are Transportadora de Gas del Sur SA (ADR) (NYSE:TGS), Milacron Holdings Corp (NYSE:MCRN), Kraton Performance Polymers Inc (NYSE:KRA), and Interface, Inc. (NASDAQ:TILE). All of these stocks’ market caps resemble SMP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TGS 6 20610 -1
MCRN 6 74600 -2
KRA 25 227559 1
TILE 21 114656 3

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $145 million in SMP’s case. Kraton Performance Polymers Inc (NYSE:KRA) is the most popular stock in this table. On the other hand Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) is the least popular one with only 6 bullish hedge fund positions. Standard Motor Products, Inc. (NYSE:SMP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KRA might be a better candidate to consider taking a long position in.

Disclosure: None


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