Is Woodward Inc (NASDAQ:WWD) a buy right now? Hedge funds are getting more optimistic. The number of bullish hedge fund positions increased by 2 lately.
If you’d ask most shareholders, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are more than 8000 funds in operation at present, we hone in on the crème de la crème of this group, around 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by monitoring their highest performing picks, we have identified a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, bullish insider trading activity is another way to break down the marketplace. There are many motivations for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action encompassing Woodward Inc (NASDAQ:WWD).
What have hedge funds been doing with Woodward Inc (NASDAQ:WWD)?
Heading into Q2, a total of 11 of the hedge funds we track held long positions in this stock, a change of 22% from the previous quarter.
As aggregate interest increased, some big names were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, initiated the largest position in Woodward Inc (NASDAQ:WWD). SAC Capital Advisors had 0.3 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.
How are insiders trading Woodward Inc (NASDAQ:WWD)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Woodward Inc (NASDAQ:WWD) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Woodward Inc (NASDAQ:WWD). These stocks are General Cable Corporation (NYSE:BGC), REGAL-BELOIT CORPORATION (NYSE:RBC), A. O. Smith Corporation (NYSE:AOS), EnerSys (NYSE:ENS), and Belden Inc. (NYSE:BDC). This group of stocks belong to the industrial electrical equipment industry and their market caps are similar to WWD’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|General Cable Corporation (NYSE:BGC)||21||0||4|
|REGAL-BELOIT CORPORATION (NYSE:RBC)||13||0||2|
|A. O. Smith Corporation (NYSE:AOS)||11||0||13|
|Belden Inc. (NYSE:BDC)||14||2||6|
With the returns shown by the aforementioned strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Woodward Inc (NASDAQ:WWD) is no exception.