If you’d ask most investors, hedge funds are viewed as worthless, old financial tools of years past. While there are greater than 8000 funds in operation today, we at Insider Monkey look at the moguls of this group, around 450 funds. It is estimated that this group oversees the majority of the smart money’s total asset base, and by paying attention to their best stock picks, we have spotted a few investment strategies that have historically beaten Mr. Market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are many incentives for an insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if shareholders understand what to do (learn more here).
Consequently, let’s take a gander at the key action encompassing Tower International Inc (NYSE:TOWR).
How have hedgies been trading Tower International Inc (NYSE:TOWR)?
At the end of the fourth quarter, a total of 2 of the hedge funds we track held long positions in this stock, a change of -33% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were tweaking their stakes significantly.
Since Tower International Inc (NYSE:TOWR) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that elected to cut their full holdings last quarter. Intriguingly, Israel Englander’s Millennium Management sold off the largest investment of all the hedgies we monitor, comprising about $0.2 million in stock. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds last quarter.
What do corporate executives and insiders think about Tower International Inc (NYSE:TOWR)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, Tower International Inc (NYSE:TOWR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Tower International Inc (NYSE:TOWR). These stocks are Park-Ohio Holdings Corp. (NASDAQ:PKOH), Dynamic Materials Corporation (NASDAQ:BOOM), Graham Corporation (NYSEAMEX:GHM), Olympic Steel, Inc. (NASDAQ:ZEUS), and Gulf Island Fabrication, Inc. (NASDAQ:GIFI). This group of stocks are the members of the metal fabrication industry and their market caps are similar to TOWR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Park-Ohio Holdings Corp. (NASDAQ:PKOH) | 4 | 2 | 5 |
| Dynamic Materials Corporation (NASDAQ:BOOM) | 5 | 0 | 3 |
| Graham Corporation (NYSEAMEX:GHM) | 2 | 2 | 3 |
| Olympic Steel, Inc. (NASDAQ:ZEUS) | 5 | 3 | 0 |
| Gulf Island Fabrication, Inc. (NASDAQ:GIFI) | 3 | 2 | 0 |
With the results shown by our research, everyday investors must always watch hedge fund and insider trading sentiment, and Tower International Inc (NYSE:TOWR) applies perfectly to this mantra.
