Is AZZ Incorporated (NYSE:AZZ) a bargain? Money managers are in a bullish mood. The number of long hedge fund bets went up by 4 in recent months.
According to most market participants, hedge funds are perceived as underperforming, old financial tools of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey look at the moguls of this club, around 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their highest performing picks, we have brought to light a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as integral, bullish insider trading sentiment is another way to parse down the stock market universe. As the old adage goes: there are a number of motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the key action encompassing AZZ Incorporated (NYSE:AZZ).
Hedge fund activity in AZZ Incorporated (NYSE:AZZ)
At year’s end, a total of 15 of the hedge funds we track held long positions in this stock, a change of 36% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in AZZ Incorporated (NYSE:AZZ). Royce & Associates has a $78 million position in the stock, comprising 0.3% of its 13F portfolio. On Royce & Associates’s heels is Andrew Sandler of Sandler Capital Management, with a $16 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Robert B. Gillam’s McKinley Capital Management.
As industrywide interest jumped, some big names have jumped into AZZ Incorporated (NYSE:AZZ) headfirst. Sandler Capital Management, managed by Andrew Sandler, established the most valuable position in AZZ Incorporated (NYSE:AZZ). Sandler Capital Management had 16 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital, Paul Tudor Jones’s Tudor Investment Corp, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading AZZ Incorporated (NYSE:AZZ)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, AZZ Incorporated (NYSE:AZZ) has seen 1 unique insiders buying, and 9 insider sales (see the details of insider trades here).
With the results shown by our research, everyday investors should always watch hedge fund and insider trading activity, and AZZ Incorporated (NYSE:AZZ) applies perfectly to this mantra.
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