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This Metric Says You Are Smart to Buy American Woodmark Corporation (AMWD)

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American Woodmark Corporation (NASDAQ:AMWD) was in 12 hedge funds’ portfolio at the end of March. AMWD shareholders have witnessed an increase in hedge fund interest in recent months. There were 9 hedge funds in our database with AMWD holdings at the end of the previous quarter.

In today’s marketplace, there are many indicators shareholders can use to analyze stocks. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can trounce the market by a very impressive amount (see just how much).

Chuck Royce

Just as key, positive insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a variety of motivations for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).

Now, it’s important to take a glance at the latest action regarding American Woodmark Corporation (NASDAQ:AMWD).

What does the smart money think about American Woodmark Corporation (NASDAQ:AMWD)?

In preparation for this quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 33% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in American Woodmark Corporation (NASDAQ:AMWD), worth close to $37.1 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by SAC Capital Advisors, managed by Steven Cohen, which held a $23.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Jim Simons’s Renaissance Technologies, Richard Driehaus’s Driehaus Capital and Charles Davidson’s Wexford Capital.

As aggregate interest increased, key money managers have jumped into American Woodmark Corporation (NASDAQ:AMWD) headfirst. Millennium Management, managed by Israel Englander, initiated the most outsized position in American Woodmark Corporation (NASDAQ:AMWD). Millennium Management had 1.4 million invested in the company at the end of the quarter. Robert Polak’s Anchor Bolt Capital also made a $0.8 million investment in the stock during the quarter. The only other fund with a new position in the stock is Cliff Asness’s AQR Capital Management.

Insider trading activity in American Woodmark Corporation (NASDAQ:AMWD)

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, American Woodmark Corporation (NASDAQ:AMWD) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to American Woodmark Corporation (NASDAQ:AMWD). These stocks are Flexsteel Industries, Inc. (NASDAQ:FLXS), Mattress Firm Holding Corp (NASDAQ:MFRM), Select Comfort Corp. (NASDAQ:SCSS), La-Z-Boy Incorporated (NYSE:LZB), and Ethan Allen Interiors Inc. (NYSE:ETH). This group of stocks are the members of the home furnishings & fixtures industry and their market caps are closest to AMWD’s market cap.

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