Is it smart to be bullish on AMETEK, Inc. (NYSE:AME)?
If you were to ask many traders, hedge funds are seen as bloated, old financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open currently, Insider Monkey aim at the top tier of this group, around 525 funds. It is widely held that this group has its hands on most of all hedge funds’ total capital, and by watching their highest performing equity investments, we’ve revealed a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, optimistic insider trading activity is a second way to analyze the stock market universe. Obviously, there are a variety of incentives for an executive to downsize shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
Thus, it’s important to examine the newest info surrounding AMETEK, Inc. (NYSE:AME).
How have hedgies been trading AMETEK, Inc. (NYSE:AME)?
Heading into Q3, a total of 18 of the hedge funds we track held long positions in this stock, a change of 64% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.
When using filings from the hedgies we track, Mario Gabelli’s GAMCO Investors had the most valuable position in AMETEK, Inc. (NYSE:AME), worth close to $145.6 million, comprising 0.9% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Joseph Caruso of Select Equity Group, with a $93.6 million position; 1.3% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Steven Cohen’s SAC Capital Advisors, Jim Simons’s Renaissance Technologies and Ken Griffin’s Citadel Investment Group.
As one would understandably expect, particular hedge funds have been driving this bullishness. GAMCO Investors, managed by Mario Gabelli, created the largest position in AMETEK, Inc. (NYSE:AME). GAMCO Investors had 145.6 million invested in the company at the end of the quarter. Robert Joseph Caruso’s Select Equity Group also initiated a $93.6 million position during the quarter. The other funds with new positions in the stock are Steven Cohen’s SAC Capital Advisors, Jim Simons’s Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.
How are insiders trading AMETEK, Inc. (NYSE:AME)?
Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, AMETEK, Inc. (NYSE:AME) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to AMETEK, Inc. (NYSE:AME). These stocks are A. O. Smith Corporation (NYSE:AOS), REGAL-BELOIT CORPORATION (NYSE:RBC), Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), Nidec Corporation (ADR) (NYSE:NJ), and Rockwell Automation (NYSE:ROK). This group of stocks are the members of the industrial electrical equipment industry and their market caps are closest to AME’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| A. O. Smith Corporation (NYSE:AOS) | 24 | 0 | 0 |
| REGAL-BELOIT CORPORATION (NYSE:RBC) | 16 | 0 | 0 |
| Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) | 45 | 0 | 0 |
| Nidec Corporation (ADR) (NYSE:NJ) | 5 | 0 | 0 |
| Rockwell Automation (NYSE:ROK) | 27 | 0 | 0 |
Using the results explained by the previously mentioned strategies, average investors should always track hedge fund and insider trading sentiment, and AMETEK, Inc. (NYSE:AME) shareholders fit into this picture quite nicely.
