Does it make sense to take profits on Newell Rubbermaid Inc. (NYSE:NWL), a stock that has seen its fortunes rise by 16% year-to-date?
To the average investor, there are tons of indicators market participants can use to watch publicly traded companies. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outclass the S&P 500 by a very impressive margin (see just how much).
Just as crucial, positive insider trading activity is a second way to analyze the stock market universe. Just as you’d expect, there are a number of reasons for an insider to sell shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
Thus, we’re going to study the recent info surrounding Newell Rubbermaid Inc. (NYSE:NWL).
How have hedgies been trading Newell Rubbermaid Inc. (NYSE:NWL)?
Heading into Q3, a total of 22 of the hedge funds we track were long in this stock, a change of -4% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
According to our 13F database, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Newell Rubbermaid Inc. (NYSE:NWL). Citadel Investment Group has a $117.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by John W. Rogers of Ariel Investments, with a $102.3 million position; 1.7% of its 13F portfolio is allocated to the company. Other peers that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.
Since Newell Rubbermaid Inc. (NYSE:NWL) has witnessed a fall in interest from the smart money’s best and brightest, we can see that there exists a select few funds who were dropping their positions entirely last quarter. At the top of the heap, Patrick Degorce’s Theleme Partners said goodbye to the largest stake of all the hedgies we monitor, totaling about $99.4 million in stock. Andreas Halvorsen’s fund, Viking Global, also said goodbye to its stock, about $81.7 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds last quarter.
What have insiders been doing with Newell Rubbermaid Inc. (NYSE:NWL)?
Legal insider trading, particularly when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Newell Rubbermaid Inc. (NYSE:NWL) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Newell Rubbermaid Inc. (NYSE:NWL). These stocks are Lifetime Brands Inc (NASDAQ:LCUT), Libbey Inc. (NYSEAMEX:LBY), Helen of Troy Limited (NASDAQ:HELE), The Clorox Company (NYSE:CLX), and Jarden Corp (NYSE:JAH). This group of stocks are the members of the housewares & accessories industry and their market caps are similar to NWL’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Lifetime Brands Inc (NASDAQ:LCUT)||0||8|
|Libbey Inc. (NYSEAMEX:LBY)||10||0||1|
|Helen of Troy Limited (NASDAQ:HELE)||11||0||6|
|The Clorox Company (NYSE:CLX)||19||0||12|
|Jarden Corp (NYSE:JAH)||34||0||8|
Using the returns shown by the previously mentioned research, regular investors must always keep one eye on hedge fund and insider trading activity, and Newell Rubbermaid Inc. (NYSE:NWL) is an important part of this process.