Is Columbus McKinnon Corp. (NASDAQ:CMCO) ready to rally soon? Hedge funds are getting less optimistic. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
If you’d ask most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation today, we at Insider Monkey hone in on the upper echelon of this club, around 450 funds. Most estimates calculate that this group oversees most of the smart money’s total capital, and by keeping an eye on their top investments, we have brought to light a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, optimistic insider trading activity is a second way to break down the world of equities. Obviously, there are a number of motivations for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Keeping this in mind, let’s take a glance at the recent action encompassing Columbus McKinnon Corp. (NASDAQ:CMCO).
Hedge fund activity in Columbus McKinnon Corp. (NASDAQ:CMCO)
In preparation for this quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Columbus McKinnon Corp. (NASDAQ:CMCO), worth close to $15.9 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Gotham Asset Management, managed by Joel Greenblatt, which held a $1.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
Because Columbus McKinnon Corp. (NASDAQ:CMCO) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there were a few money managers who were dropping their entire stakes last quarter. At the top of the heap, Jim Simons’s Renaissance Technologies cut the largest investment of the 450+ funds we key on, worth an estimated $0.3 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund sold off about $0.1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Columbus McKinnon Corp. (NASDAQ:CMCO)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest six-month time period, Columbus McKinnon Corp. (NASDAQ:CMCO) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Columbus McKinnon Corp. (NASDAQ:CMCO). These stocks are Lindsay Corporation (NYSE:LNN), Astec Industries, Inc. (NASDAQ:ASTE), Cascade Corporation (NYSE:CASC), Alamo Group, Inc. (NYSE:ALG), and NACCO Industries, Inc. (NYSE:NC). This group of stocks are the members of the farm & construction machinery industry and their market caps are closest to CMCO’s market cap.