Methode Electronics Inc. (NYSE:MEI) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. MEI has seen an increase in hedge fund sentiment in recent months. There were 6 hedge funds in our database with MEI positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are dozens of metrics market participants can use to analyze Mr. Market. A pair of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform the S&P 500 by a significant amount (see just how much).
Just as integral, optimistic insider trading activity is a second way to parse down the financial markets. Obviously, there are lots of reasons for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).
With all of this in mind, let’s take a look at the recent action encompassing Methode Electronics Inc. (NYSE:MEI).
How have hedgies been trading Methode Electronics Inc. (NYSE:MEI)?
In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 67% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in Methode Electronics Inc. (NYSE:MEI), worth close to $15 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by McKinley Capital Management, managed by Robert B. Gillam, which held a $3.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Mario Gabelli’s GAMCO Investors, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
Now, key money managers have been driving this bullishness. McKinley Capital Management, managed by Robert B. Gillam, established the largest position in Methode Electronics Inc. (NYSE:MEI). McKinley Capital Management had 3.1 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also made a $0.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington and John Burbank’s Passport Capital.
Insider trading activity in Methode Electronics Inc. (NYSE:MEI)
Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Methode Electronics Inc. (NYSE:MEI) has experienced 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Methode Electronics Inc. (NYSE:MEI). These stocks are CTS Corporation (NYSE:CTS), Nam Tai Electronics, Inc. (NYSE:NTE), Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), Orbotech Ltd. (NASDAQ:ORBK), and Power One Inc (NASDAQ:PWER). This group of stocks are the members of the diversified electronics industry and their market caps are closest to MEI’s market cap.
