L.B. Foster Company (NASDAQ:FSTR) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months.
In the financial world, there are dozens of indicators shareholders can use to watch publicly traded companies. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can outperform the S&P 500 by a superb margin (see just how much).
Just as key, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are a variety of stimuli for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Now, it’s important to take a gander at the recent action encompassing L.B. Foster Company (NASDAQ:FSTR).
Hedge fund activity in L.B. Foster Company (NASDAQ:FSTR)
Heading into 2013, a total of 11 of the hedge funds we track held long positions in this stock, a change of 57% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in L.B. Foster Company (NASDAQ:FSTR), worth close to $74.5 million, comprising 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Israel Englander of Millennium Management, with a $2.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Cliff Asness’s AQR Capital Management and Joel Greenblatt’s Gotham Asset Management.
As aggregate interest increased, key money managers have jumped into L.B. Foster Company (NASDAQ:FSTR) headfirst. Millennium Management, managed by Israel Englander, established the most outsized position in L.B. Foster Company (NASDAQ:FSTR). Millennium Management had 2.4 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $1.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Jim Simons’s Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.
How have insiders been trading L.B. Foster Company (NASDAQ:FSTR)?
Bullish insider trading is at its handiest when the company in question has seen transactions within the past half-year. Over the last half-year time frame, L.B. Foster Company (NASDAQ:FSTR) has experienced 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to L.B. Foster Company (NASDAQ:FSTR). These stocks are China Armco Metals, Inc (NYSEAMEX:CNAM), Empire Resources Inc (NASDAQ:ERS), Macquarie Infrastructure Company LLC (NYSE:MIC), Global Partners LP (NYSE:GLP), and Aegean Marine Petroleum Network Inc. (NYSE:ANW). This group of stocks are in the basic materials wholesale industry and their market caps are closest to FSTR’s market cap.