Is Rockwell Automation (ROK) Worth Another Look?

Since Rockwell Automation (NYSE:ROK) has experienced declining sentiment from the smart money, we can see that there was a specific group of fund managers who sold off their full holdings by the end of the third quarter. Intriguingly, James Dinan’s York Capital Management cut the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $56.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $15.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Rockwell Automation (NYSE:ROK) but similarly valued. These stocks are Essex Property Trust Inc (NYSE:ESS), Ameriprise Financial, Inc. (NYSE:AMP), FirstEnergy Corp. (NYSE:FE), and NetEase, Inc (ADR) (NASDAQ:NTES). All of these stocks’ market caps are closest to ROK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ESS 19 359717 -5
AMP 29 284431 -3
FE 31 1309307 4
NTES 39 2975270 12

As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.23 billion. That figure was $432 million in ROK’s case. NetEase, Inc (ADR) (NASDAQ:NTES) is the most popular stock in this table. On the other hand Essex Property Trust Inc (NYSE:ESS) is the least popular one with only 19 bullish hedge fund positions. Rockwell Automation (NYSE:ROK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NTES might be a better candidate to consider a long position.

Disclosure: None