Here is What Hedge Funds Think About Mueller Water Products, Inc. (MWA)

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Is Mueller Water Products, Inc. (NYSE:MWA) the right investment to pursue these days? The smart money is getting less optimistic. The number of bullish hedge fund positions were cut by 1 recently.

According to most investors, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds in operation at present, we hone in on the masters of this club, about 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total capital, and by paying attention to their top investments, we have spotted a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Mueller Water Products, Inc.Just as beneficial, optimistic insider trading activity is another way to parse down the investments you’re interested in. Obviously, there are plenty of incentives for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action regarding Mueller Water Products, Inc. (NYSE:MWA).

What have hedge funds been doing with Mueller Water Products, Inc. (NYSE:MWA)?

Heading into Q2, a total of 31 of the hedge funds we track held long positions in this stock, a change of -3% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Mouth Kellett Capital Management, managed by Mark McGoldrick and Jason Maynard, holds the largest position in Mueller Water Products, Inc. (NYSE:MWA). Mouth Kellett Capital Management has a $48.6 million position in the stock, comprising 6.3% of its 13F portfolio. Coming in second is David Tepper of Appaloosa Management LP, with a $43.8 million position; 0.9% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Dmitry Balyasny’s Balyasny Asset Management, Claus Moller’s P2 Capital Partners and Larry Robbins’s Glenview Capital.

Because Mueller Water Products, Inc. (NYSE:MWA) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers who were dropping their entire stakes in Q1. At the top of the heap, Joel Ramin’s 12 West Capital Management dropped the largest stake of the “upper crust” of funds we track, valued at an estimated $15.5 million in stock. Timothy S. Peterson’s fund, Regiment Capital, also cut its stock, about $8.4 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds in Q1.

What have insiders been doing with Mueller Water Products, Inc. (NYSE:MWA)?

Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, Mueller Water Products, Inc. (NYSE:MWA) has seen 3 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Mueller Water Products, Inc. (NYSE:MWA). These stocks are Standex Int’l Corp. (NYSE:SXI), H&E Equipment Services, Inc. (NASDAQ:HEES), CIRCOR International, Inc. (NYSE:CIR), EnPro Industries, Inc. (NYSE:NPO), and Sun Hydraulics Corporation (NASDAQ:SNHY). This group of stocks are the members of the industrial equipment & components industry and their market caps match MWA’s market cap.

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