Hedge Funds Aren’t Crazy About AMETEK, Inc. (AME) Anymore: A. O. Smith Corporation (AOS), REGAL-BELOIT CORPORATION (RBC)

AMETEK, Inc. (NYSE:AME) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. AME investors should be aware of a decrease in hedge fund interest of late. There were 15 hedge funds in our database with AME holdings at the end of the previous quarter.


In the 21st century investor’s toolkit, there are plenty of indicators market participants can use to monitor stocks. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outperform their index-focused peers by a healthy margin (see just how much).

Equally as important, bullish insider trading sentiment is another way to break down the financial markets. There are a number of incentives for an executive to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).

Keeping this in mind, let’s take a glance at the latest action regarding AMETEK, Inc. (NYSE:AME).

How have hedgies been trading AMETEK, Inc. (NYSE:AME)?

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -13% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes considerably.

According to our comprehensive database, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in AMETEK, Inc. (NYSE:AME). Select Equity Group has a $161 million position in the stock, comprising 2.5% of its 13F portfolio. Coming in second is Mario Gabelli of GAMCO Investors, with a $139 million position; 1.9% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Bain Capital’s Brookside Capital, Alexander Mitchell’s Scopus Asset Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that AMETEK, Inc. (NYSE:AME) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of fund managers who were dropping their positions entirely heading into 2013. At the top of the heap, Bain Capital’s Brookside Capital dropped the biggest investment of the “upper crust” of funds we track, comprising about $72 million in stock., and Ken Gray and Steve Walsh of Bryn Mawr Capital was right behind this move, as the fund said goodbye to about $3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into 2013.

What have insiders been doing with AMETEK, Inc. (NYSE:AME)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, AMETEK, Inc. (NYSE:AME) has experienced 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to AMETEK, Inc. (NYSE:AME). These stocks are A. O. Smith Corporation (NYSE:AOS), REGAL-BELOIT CORPORATION (NYSE:RBC), Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), Nidec Corporation (ADR) (NYSE:NJ), and Rockwell Automation (NYSE:ROK). This group of stocks are in the industrial electrical equipment industry and their market caps are similar to AME’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
A. O. Smith Corporation (NYSE:AOS) 9 0 13
Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) 33 0 8
Nidec Corporation (ADR) (NYSE:NJ) 4 0 0
Rockwell Automation (NYSE:ROK) 25 0 16

With the returns demonstrated by our tactics, retail investors must always keep an eye on hedge fund and insider trading activity, and AMETEK, Inc. (NYSE:AME) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.