At the moment, there are dozens of gauges investors can use to watch stocks. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outperform the S&P 500 by a very impressive margin (see just how much).
Just as key, optimistic insider trading activity is another way to analyze the investments you're interested in. Obviously, there are a variety of motivations for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).
Thus, we're going to examine the recent info surrounding Standard Motor Products, Inc. (NYSE:SMP).
At Q2's end, a total of 12 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes substantially.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Standard Motor Products, Inc. (NYSE:SMP). Royce & Associates has a $52.5 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $14.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Mario Gabelli's GAMCO Investors, Jim Simons's Renaissance Technologies and Peter Algert and Kevin Coldiron's Algert Coldiron Investors.
Judging by the fact that Standard Motor Products, Inc. (NYSE:SMP) has faced declining interest from the smart money's best and brightest, logic holds that there were a few hedgies who were dropping their full holdings at the end of the second quarter. At the top of the heap, Neil Chriss's Hutchin Hill Capital said goodbye to the largest investment of all the hedgies we watch, comprising close to $1.1 million in stock, and Joel Greenblatt of Gotham Asset Management was right behind this move, as the fund sold off about $0.2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Bullish insider trading is most useful when the company we're looking at has experienced transactions within the past half-year. Over the latest half-year time period, Standard Motor Products, Inc. (NYSE:SMP) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Standard Motor Products, Inc. (NYSE:SMP). These stocks are Meritor Inc (NYSE:MTOR), Superior Industries International Inc. (NYSE:SUP), Gentherm Inc (NASDAQ:THRM), Remy International Inc (NASDAQ:REMY), and Federal-Mogul Corporation (NASDAQ:FDML). This group of stocks are the members of the auto parts industry and their market caps match SMP's market cap.