ITT Corp (NYSE:ITT) investors should be aware of a decrease in enthusiasm from smart money recently.
In today’s marketplace, there are many metrics market participants can use to monitor the equity markets. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outpace their index-focused peers by a very impressive amount (see just how much).
Just as beneficial, optimistic insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are plenty of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).
Keeping this in mind, we’re going to take a glance at the latest action encompassing ITT Corp (NYSE:ITT).
Hedge fund activity in ITT Corp (NYSE:ITT)
At year’s end, a total of 18 of the hedge funds we track were long in this stock, a change of -10% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
According to our comprehensive database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the largest position in ITT Corp (NYSE:ITT), worth close to $45 million, comprising 0.2% of its total 13F portfolio. On Arrowstreet Capital’s heels is Dreman Value Management, managed by David Dreman, which held a $34 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Jeffrey Gates’s Gates Capital Management, Mario Gabelli’s GAMCO Investors and Cliff Asness’s AQR Capital Management.
Due to the fact that ITT Corp (NYSE:ITT) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that elected to cut their full holdings last quarter. Intriguingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC said goodbye to the biggest stake of all the hedgies we monitor, comprising close to $14 million in stock., and Robert Joseph Caruso of Select Equity Group was right behind this move, as the fund cut about $14 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds last quarter.
What do corporate executives and insiders think about ITT Corp (NYSE:ITT)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the last half-year time period, ITT Corp (NYSE:ITT) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the results shown by the aforementioned studies, everyday investors should always watch hedge fund and insider trading sentiment, and ITT Corp (NYSE:ITT) is no exception.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.