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Hedge Funds Are Selling Stanley Black & Decker, Inc. (SWK)

Stanley Black & Decker, Inc. (NYSE:SWK) was in 26 hedge funds’ portfolio at the end of the first quarter of 2013. SWK has seen a decrease in support from the world’s most elite money managers recently. There were 26 hedge funds in our database with SWK holdings at the end of the previous quarter.

At the moment, there are dozens of indicators shareholders can use to track Mr. Market. A duo of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the S&P 500 by a healthy amount (see just how much).

Equally as important, optimistic insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are lots of motivations for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).

Consequently, let’s take a glance at the key action encompassing Stanley Black & Decker, Inc. (NYSE:SWK).

Hedge fund activity in Stanley Black & Decker, Inc. (NYSE:SWK)

At the end of the first quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes substantially.

Earnings Analysis Stanley Black & Decker Inc. (NYSE:SWK)When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Stanley Black & Decker, Inc. (NYSE:SWK), worth close to $138.6 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Ariel Investments, managed by John W. Rogers, which held a $55 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Martin D. Sass’s MD Sass, Daniel S. Och’s OZ Management and Crispin Odey’s Odey Asset Management Group.

Due to the fact that Stanley Black & Decker, Inc. (NYSE:SWK) has witnessed a declination in interest from the smart money, it’s easy to see that there were a few fund managers who were dropping their positions entirely last quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of the “upper crust” of funds we key on, totaling close to $16.1 million in stock.. Richard Breeden’s fund, Breeden Capital Management, also cut its stock, about $15.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Stanley Black & Decker, Inc. (NYSE:SWK)?

Insider buying is particularly usable when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Stanley Black & Decker, Inc. (NYSE:SWK) has seen 1 unique insiders purchasing, and 17 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Stanley Black & Decker, Inc. (NYSE:SWK). These stocks are Proto Labs Inc (NYSE:PRLB), Kennametal Inc. (NYSE:KMT), MRC Global Inc (NYSE:MRC), and The Timken Company (NYSE:TKR). This group of stocks are in the machine tools & accessories industry and their market caps match SWK’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Proto Labs Inc (NYSE:PRLB) 10 1 13
Kennametal Inc. (NYSE:KMT) 15 0 7
MRC Global Inc (NYSE:MRC) 20 4 5
The Timken Company (NYSE:TKR) 21 0 7

With the results exhibited by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Stanley Black & Decker, Inc. (NYSE:SWK) is an important part of this process.

Click here to learn why you should track hedge funds

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