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Fluor Corporation (NEW) (FLR): Insiders Aren’t Crazy About It But Hedge Funds Love It

Is Fluor Corporation (NEW) (NYSE:FLR) a buy?

If you were to ask many of your fellow readers, hedge funds are seen as delayed, old investment tools of a period lost to current times. Although there are more than 8,000 hedge funds trading in present day, Insider Monkey looks at the top tier of this club, around 525 funds. It is assumed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by watching their highest quality picks, we’ve come up with a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as key, bullish insider trading sentiment is another way to look at the stock market universe. Obviously, there are plenty of stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).

Thus, it’s important to examine the recent info about Fluor Corporation (NEW) (NYSE:FLR).

Fluor Corporation (NEW) (NYSE:FLR)

Hedge fund activity in Fluor Corporation (NEW) (NYSE:FLR)

At Q2’s end, a total of 34 of the hedge funds we track were bullish in this stock, a change of 6% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.

When using filings from the hedgies we track, Appaloosa Management LP, managed by David Tepper, holds the largest position in Fluor Corporation (NEW) (NYSE:FLR). Appaloosa Management LP has a $88.4 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Robert Bishop of Impala Asset Management, with a $47.6 million position; 2.7% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Daniel Bubis’s Tetrem Capital Management, William Harnisch’s Peconic Partners LLC and Alan Fournier’s Pennant Capital Management.

As industrywide interest increased, specific money managers have jumped into Fluor Corporation (NEW) (NYSE:FLR) headfirst. Appaloosa Management LP, managed by David Tepper, assembled the most outsized position in Fluor Corporation (NEW) (NYSE:FLR). Appaloosa Management LP had 88.4 million invested in the company at the end of the quarter. Robert Bishop’s Impala Asset Management also made a $47.6 million investment in the stock during the quarter. The other funds with brand new FLR positions are Daniel Bubis’s Tetrem Capital Management, William Harnisch’s Peconic Partners LLC, and Alan Fournier’s Pennant Capital Management.

How have insiders been trading Fluor Corporation (NEW) (NYSE:FLR)?

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past six months. Over the latest half-year time period, Fluor Corporation (NEW) (NYSE:FLR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Fluor Corporation (NEW) (NYSE:FLR). These stocks are Granite Construction Inc. (NYSE:GVA), Empresas ICA SA (ADR) (NYSE:ICA), MasTec, Inc. (NYSE:MTZ), Foster Wheeler AG (NASDAQ:FWLT), and McDermott International (NYSE:MDR). This group of stocks are the members of the heavy construction industry and their market caps are closest to FLR’s market cap.

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