Franklin Electric Co. (FELE): Insiders Aren’t Crazy About It

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Franklin Electric Co. (NASDAQ:FELE) was in 12 hedge funds’ portfolio at the end of the first quarter of 2013. FELE shareholders have witnessed an increase in support from the world’s most elite money managers lately. There were 8 hedge funds in our database with FELE holdings at the end of the previous quarter.

Mario Gabelli

At the moment, there are dozens of metrics market participants can use to analyze stocks. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the broader indices by a solid margin (see just how much).

Equally as important, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. There are many incentives for an insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this tactic if investors understand what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the latest action surrounding Franklin Electric Co. (NASDAQ:FELE).

Hedge fund activity in Franklin Electric Co. (NASDAQ:FELE)

At Q1’s end, a total of 12 of the hedge funds we track were long in this stock, a change of 50% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Franklin Electric Co. (NASDAQ:FELE), worth close to $71.2 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, which held a $33.1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Mario Gabelli’s GAMCO Investors, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

As industrywide interest jumped, key money managers were breaking ground themselves. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the largest position in Franklin Electric Co. (NASDAQ:FELE). First Pacific Advisors LLC had 33.1 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0.5 million investment in the stock during the quarter. The other funds with brand new FELE positions are D. E. Shaw’s D E Shaw, Mike Vranos’s Ellington, and Paul Tudor Jones’s Tudor Investment Corp.

How are insiders trading Franklin Electric Co. (NASDAQ:FELE)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Franklin Electric Co. (NASDAQ:FELE) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Franklin Electric Co. (NASDAQ:FELE). These stocks are Belden Inc. (NYSE:BDC), EnerSys (NYSE:ENS), OSI Systems, Inc. (NASDAQ:OSIS), General Cable Corporation (NYSE:BGC), and Littelfuse, Inc. (NASDAQ:LFUS). This group of stocks belong to the industrial electrical equipment industry and their market caps resemble FELE’s market cap.

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