Is Twin Disc, Incorporated (TWIN) A Good Stock To Buy?

Does Twin Disc, Incorporated (NASDAQ:TWIN) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

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Is Twin Disc, Incorporated (NASDAQ:TWIN) a healthy stock for your portfolio? The smart money is slightly bearish on the stock with the number of funds long the stock staying the same at 7 quarter-over-quarter. At the end of this article, we will also compare Twin Disc, Incorporated (NASDAQ:TWIN) to other stocks including SandRidge Energy Inc. (NYSE:SD), Datalink Corporation (NASDAQ:DTLK), and Silicon Graphics International Corp (NASDAQ:SGI) to get a better sense of its popularity.

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With all of this in mind, let’s check out the fresh action surrounding Twin Disc, Incorporated (NASDAQ:TWIN).

Hedge fund activity in Twin Disc, Incorporated (NASDAQ:TWIN)

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, flat over the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

When looking at the hedgies followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Twin Disc, Incorporated (NASDAQ:TWIN). GAMCO Investors has a $11.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $1 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish contain Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that Twin Disc, Incorporated (NASDAQ:TWIN) has experienced bearish sentiment from the smart money, logic holds that there is a sect of fund managers that decided to sell off their positions entirely at the end of the third quarter. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors sold off the biggest stake of all the hedgies watched by Insider Monkey, comprising about $0.3 million in stock. D E Shaw, also cut its stock, about $0.3 million worth.

Let’s also review hedge fund activity in other stocks similar to Twin Disc, Incorporated (NASDAQ:TWIN). We will take a look at SandRidge Energy Inc. (NYSE:SD), Datalink Corporation (NASDAQ:DTLK), Silicon Graphics International Corp (NASDAQ:SGI), and Bioamber Inc (NYSE:BIOA). This group of stocks’ market valuations resemble Twin Disc, Incorporated (NASDAQ:TWIN)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SD 20 33014 2
DTLK 13 15109 0
SGI 8 17342 0
BIOA 9 16584 0

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. SandRidge Energy Inc. (NYSE:SD) is the most popular stock in this table. On the other hand Silicon Graphics International Corp (NASDAQ:SGI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Twin Disc, Incorporated (NASDAQ:TWIN) is even less popular than Silicon Graphics International Corp (NASDAQ:SGI). Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.