Hedge Funds Are Dumping Brady Corp (BRC)

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What’s a smart Brady Corp (NYSE:BRC) investor to do?

In the financial world, there are dozens of metrics investors can use to watch publicly traded companies. Some of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outclass the market by a very impressive amount (see just how much).

Just as necessary, positive insider trading sentiment is a second way to analyze the financial markets. Obviously, there are a number of stimuli for an insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).

What’s more, it’s important to examine the latest info surrounding Brady Corp (NYSE:BRC).

Brady Corp (NYSE:BRC)

How are hedge funds trading Brady Corp (NYSE:BRC)?

In preparation for the third quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -36% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially.

When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Brady Corp (NYSE:BRC), worth close to $116.4 million, accounting for 0.4% of its total 13F portfolio. Coming in second is John W. Rogers of Ariel Investments, with a $77.6 million position; 1.3% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Richard S. Pzena’s Pzena Investment Management, David Dreman’s Dreman Value Management and Israel Englander’s Millennium Management.

Due to the fact Brady Corp (NYSE:BRC) has faced bearish sentiment from the smart money’s best and brightest, it’s safe to say that there was a specific group of funds that slashed their entire stakes at the end of the second quarter. Interestingly, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors sold off the biggest position of the “upper crust” of funds we track, comprising about $0.9 million in stock, and Jim Simons of Renaissance Technologies was right behind this move, as the fund sold off about $0.8 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 5 funds at the end of the second quarter.

How have insiders been trading Brady Corp (NYSE:BRC)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time frame, Brady Corp (NYSE:BRC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Brady Corp (NYSE:BRC). These stocks are Intralinks Holdings Inc (NYSE:IL), KEYW Holding Corp. (NASDAQ:KEYW), AsiaInfo-Linkage, Inc. (NASDAQ:ASIA), Mantech International Corp (NASDAQ:MANT), and Sourcefire, Inc. (NASDAQ:FIRE). This group of stocks belong to the security software & services industry and their market caps match BRC’s market cap.

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