Babcock & Wilcox Co (BWC): Are Hedge Funds Right About This Stock?

insider trading bwcBabcock & Wilcox Co (NYSE:BWC) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late.

At the moment, there are dozens of gauges investors can use to watch their holdings. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can beat their index-focused peers by a significant margin (see just how much).

Just as integral, positive insider trading activity is another way to parse down the world of equities. There are a variety of incentives for an insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).

Consequently, we’re going to take a peek at the recent action regarding Babcock & Wilcox Co (NYSE:BWC).

Hedge fund activity in Babcock & Wilcox Co (NYSE:BWC)

At Q1’s end, a total of 27 of the hedge funds we track were long in this stock, a change of 69% from the first quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Mason Capital Management, managed by Kenneth Mario Garschina, holds the most valuable position in Babcock & Wilcox Co (NYSE:BWC). Mason Capital Management has a $337.9 million position in the stock, comprising 8.4% of its 13F portfolio. Coming in second is Larry Robbins of Glenview Capital, with a $157 million position; 1.7% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include David Einhorn’s Greenlight Capital, Anthony Bozza’s Lakewood Capital Management and D. E. Shaw’s D E Shaw.

Consequently, key money managers have been driving this bullishness. Kingstown Capital Management, managed by Michael Blitzer, initiated the biggest position in Babcock & Wilcox Co (NYSE:BWC). Kingstown Capital Management had 28.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $16.6 million investment in the stock during the quarter. The following funds were also among the new BWC investors: Frank Brosens’s Taconic Capital, Neil Chriss’s Hutchin Hill Capital, and Joel Greenblatt’s Gotham Asset Management.

How have insiders been trading Babcock & Wilcox Co (NYSE:BWC)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time period, Babcock & Wilcox Co (NYSE:BWC) has experienced 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Babcock & Wilcox Co (NYSE:BWC). These stocks are The Middleby Corporation (NASDAQ:MIDD), 3D Systems Corporation (NYSE:DDD), Graco Inc. (NYSE:GGG), Lennox International Inc. (NYSE:LII), and Crane Co. (NYSE:CR). This group of stocks are the members of the diversified machinery industry and their market caps are closest to BWC’s market cap.