Is Gardner Denver, Inc. (NYSE:GDI) a buy right now? Prominent investors are in an optimistic mood. The number of bullish hedge fund bets rose by 23 lately.
In the 21st century investor’s toolkit, there are a multitude of metrics market participants can use to watch their holdings. A pair of the most underrated 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 investment managers can outpace the broader indices by a significant margin (see just how much).
Equally as important, optimistic insider trading sentiment is another way to break down the stock market universe. Just as you'd expect, there are a number of incentives for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).
Now, we're going to take a look at the latest action surrounding Gardner Denver, Inc. (NYSE:GDI).
At the end of the fourth quarter, a total of 47 of the hedge funds we track were bullish in this stock, a change of 96% from the third quarter. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, ValueAct Capital, managed by Jeffrey Ubben, holds the most valuable position in Gardner Denver, Inc. (NYSE:GDI). ValueAct Capital has a $172 million billion position in the stock, comprising 2.2% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $103 million position; 2.6% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Phill Gross and Robert Atchinson's Adage Capital Management, Matthew Halbower's Pentwater Capital Management and Nick Niell's Arrowgrass Capital Partners.
As industrywide interest jumped, some big names were leading the bulls' herd. Pentwater Capital Management, managed by Matthew Halbower, created the most outsized position in Gardner Denver, Inc. (NYSE:GDI). Pentwater Capital Management had 71 million invested in the company at the end of the quarter. Nick Niell's Arrowgrass Capital Partners also made a $56 million investment in the stock during the quarter. The other funds with new positions in the stock are Daniel S. Och's OZ Management, Eric Mindich's Eton Park Capital, and Carl Tiedemann and Michael Tiedemann's TIG Advisors.
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, Gardner Denver, Inc. (NYSE:GDI) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey's time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Gardner Denver, Inc. (NYSE:GDI) applies perfectly to this mantra.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.