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Do Hedge Funds and Insiders Love Drew Industries, Inc. (DW)? – Federal Signal Corporation (FSS), Winnebago Industries, Inc. (WGO)

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Drew Industries, Inc. (NYSE:DW) was in 10 hedge funds’ portfolio at the end of December. DW has seen a decrease in support from the world’s most elite money managers of late. There were 11 hedge funds in our database with DW holdings at the end of the previous quarter.

Drew Industries, Inc. (NYSE:DW)

In the eyes of most stock holders, hedge funds are seen as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, we choose to focus on the leaders of this group, around 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their best equity investments, we have identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as beneficial, positive insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are a variety of stimuli for an insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if “monkeys” understand where to look (learn more here).

Now, it’s important to take a gander at the latest action surrounding Drew Industries, Inc. (NYSE:DW).

Hedge fund activity in Drew Industries, Inc. (NYSE:DW)

Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of -9% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in Drew Industries, Inc. (NYSE:DW). Royce & Associates has a $59 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Mark Broach of Manatuck Hill Partners, with a $6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other peers that hold long positions include Richard Driehaus’s Driehaus Capital, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.

Judging by the fact that Drew Industries, Inc. (NYSE:DW) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there was a specific group of hedgies that slashed their positions entirely heading into 2013. It’s worth mentioning that Israel Englander’s Millennium Management said goodbye to the biggest investment of the 450+ funds we watch, valued at an estimated $1 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dumped its stock, about $1 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds heading into 2013.

How are insiders trading Drew Industries, Inc. (NYSE:DW)?

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest six-month time period, Drew Industries, Inc. (NYSE:DW) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Drew Industries, Inc. (NYSE:DW). These stocks are Polaris Industries Inc. (NYSE:PII), Thor Industries, Inc. (NYSE:THO), Federal Signal Corporation (NYSE:FSS), Arctic Cat Inc (NASDAQ:ACAT), and Winnebago Industries, Inc. (NYSE:WGO). This group of stocks are in the recreational vehicles industry and their market caps are similar to DW’s market cap.

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