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The Timken Company (TKR): Are Hedge Funds Right About This Stock?

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At the moment, there are dozens of indicators shareholders can use to monitor Mr. Market. Some of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can outclass the S&P 500 by a superb margin (see just how much).

Equally as necessary, bullish insider trading activity is another way to analyze the world of equities. Just as you’d expect, there are lots of incentives for an executive to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

The Timken Company

Thus, it’s important to analyze the latest info for The Timken Company (NYSE:TKR).

How have hedgies been trading The Timken Company (NYSE:TKR)?

At Q2’s end, a total of 25 of the hedge funds we track held long positions in this stock, a change of 19% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

According to our 13F database, Relational Investors, managed by Ralph V. Whitworth, holds the most valuable position in The Timken Company (NYSE:TKR). Relational Investors has a $372.4 million position in the stock, comprising 7% of its 13F portfolio. On Relational Investors’s heels is AQR Capital Management, managed by Cliff Asness, which held a $58.3 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Thomas E. Claugus’s GMT Capital, Tom Sandell’s Sandell Asset Management and Chuck Royce’s Royce & Associates.

As aggregate interest spiked, certain money managers were breaking ground themselves. Relational Investors, managed by Ralph V. Whitworth, established the most outsized position in The Timken Company (NYSE:TKR). Relational Investors had 372.4 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $58.3 million investment in the stock during the quarter. The other funds with brand new TKR positions are Thomas E. Claugus’s GMT Capital, Tom Sandell’s Sandell Asset Management, and Chuck Royce’s Royce & Associates.

What do corporate executives and insiders think about The Timken Company (NYSE:TKR)?

Insider buying made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, The Timken Company (NYSE:TKR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to The Timken Company (NYSE:TKR). These stocks are RBC Bearings Incorporated (NASDAQ:ROLL), Proto Labs Inc (NYSE:PRLB), Stanley Black & Decker, Inc. (NYSE:SWK), Kennametal Inc. (NYSE:KMT), and MRC Global Inc (NYSE:MRC). This group of stocks are in the machine tools & accessories industry and their market caps match TKR’s market cap.

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