Griffon Corporation (GFF): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

In the eyes of many of your peers, hedge funds are perceived as delayed, outdated investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds with their doors open currently, Insider Monkey aim at the masters of this club, close to 525 funds. It is widely held that this group has its hands on most of the hedge fund industry’s total assets, and by tracking their highest performing equity investments, we’ve come up with a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as useful, bullish insider trading activity is a second way to analyze the marketplace. Obviously, there are many stimuli for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).

Thus, let’s study the latest info surrounding Griffon Corporation (NYSE:GFF).

Griffon Corporation (NYSE:GFF)

How are hedge funds trading Griffon Corporation (NYSE:GFF)?

At the end of the second quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -23% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably.

When using filings from the hedgies we track, Mario Gabelli’s GAMCO Investors had the biggest position in Griffon Corporation (NYSE:GFF), worth close to $73.6 million, accounting for 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Richard S. Pzena of Pzena Investment Management, with a $24.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, D. E. Shaw’s D E Shaw and Doug Silverman and Alexander Klabin’s Senator Investment Group.

As Griffon Corporation (NYSE:GFF) has faced a fall in interest from upper-tier hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers that slashed their entire stakes in Q1. At the top of the heap, Richard S. Meisenberg’s ACK Asset Management said goodbye to the biggest position of the “upper crust” of funds we track, valued at about $4.8 million in stock, and Jim Simons of Renaissance Technologies was right behind this move, as the fund cut about $0.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds in Q1.

How are insiders trading Griffon Corporation (NYSE:GFF)?

Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time period, Griffon Corporation (NYSE:GFF) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Griffon Corporation (NYSE:GFF). These stocks are Trex Company, Inc. (NYSE:TREX), Apogee Enterprises, Inc. (NASDAQ:APOG), Headwaters Inc (NYSE:HW), Universal Forest Products, Inc. (NASDAQ:UFPI), and AAON, Inc. (NASDAQ:AAON). This group of stocks are in the general building materials industry and their market caps match GFF’s market cap.