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Should You Buy Belden Inc. (NYSE:BDC)? – A. O. Smith Corporation (NYSE:AOS), Franklin Electric Co. (NASDAQ:FELE)

Belden Inc. (NYSE:BDC) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. BDC has experienced an increase in activity from the world’s largest hedge funds recently. There were 11 hedge funds in our database with BDC holdings at the end of the previous quarter.

Belden Inc. (NYSE:BDC)

In today’s marketplace, there are a multitude of indicators market participants can use to watch publicly traded companies. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can beat the broader indices by a healthy margin (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for an executive to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).

Now, we’re going to take a peek at the key action surrounding Belden Inc. (NYSE:BDC).

How have hedgies been trading Belden Inc. (NYSE:BDC)?

At year’s end, a total of 13 of the hedge funds we track were long in this stock, a change of 18% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Matthew Lindenbaum’s Basswood Capital had the most valuable position in Belden Inc. (NYSE:BDC), worth close to $30 million, accounting for 3.2% of its total 13F portfolio. Coming in second is Columbus Circle Investors, managed by Donald Chiboucis, which held a $24 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Chuck Royce’s Royce & Associates, Mario Gabelli’s GAMCO Investors and Joel Greenblatt’s Gotham Asset Management.

Now, key hedge funds have been driving this bullishness. Columbus Circle Investors, managed by Donald Chiboucis, established the most valuable position in Belden Inc. (NYSE:BDC). Columbus Circle Investors had 24 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $0 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp and Mike Vranos’s Ellington.

What have insiders been doing with Belden Inc. (NYSE:BDC)?

Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, Belden Inc. (NYSE:BDC) has experienced 2 unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Belden Inc. (NYSE:BDC). These stocks are A. O. Smith Corporation (NYSE:AOS), Franklin Electric Co. (NASDAQ:FELE), General Cable Corporation (NYSE:BGC), Woodward Inc (NASDAQ:WWD), and EnerSys (NYSE:ENS). This group of stocks are the members of the industrial electrical equipment industry and their market caps match BDC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
A. O. Smith Corporation (NYSE:AOS) 9 0 13
Franklin Electric Co. (NASDAQ:FELE) 7 0 5
General Cable Corporation (NYSE:BGC) 20 0 4
Woodward Inc (NASDAQ:WWD) 8 1 4
EnerSys (NYSE:ENS) 19 0 2

With the results exhibited by the aforementioned strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and Belden Inc. (NYSE:BDC) is an important part of this process.

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

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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