Is WABCO Holdings Inc. (WBC) Going to Burn These Hedge Funds?

WABCO Holdings Inc. (NYSE:WBC) was in 33 hedge funds’ portfolio at the end of March. WBC investors should pay attention to an increase in hedge fund interest lately. There were 32 hedge funds in our database with WBC positions at the end of the previous quarter.

WABCO Holdings Inc. (NYSE:WBC)

To the average investor, there are plenty of metrics investors can use to track the equity markets. Two of the most useful 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 top fund managers can outpace the S&P 500 by a healthy amount (see just how much).

Just as important, optimistic insider trading activity is another way to break down the stock market universe. There are many reasons for an executive to get rid of shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Consequently, we’re going to take a gander at the recent action regarding WABCO Holdings Inc. (NYSE:WBC).

What does the smart money think about WABCO Holdings Inc. (NYSE:WBC)?

At Q1’s end, a total of 33 of the hedge funds we track held long positions in this stock, a change of 3% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Warren Buffett’s Berkshire Hathaway had the largest position in WABCO Holdings Inc. (NYSE:WBC), worth close to $287.7 million, comprising 0.3% of its total 13F portfolio. On Berkshire Hathaway’s heels is Lone Pine Capital, managed by Stephen Mandel, which held a $243.1 million position; 1.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Alan Fournier’s Pennant Capital Management, Bob Peck and Andy Raab’s FPR Partners and Phill Gross and Robert Atchinson’s Adage Capital Management.

Now, key money managers were leading the bulls’ herd. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, created the biggest position in WABCO Holdings Inc. (NYSE:WBC). First Pacific Advisors LLC had 60.5 million invested in the company at the end of the quarter. Dinakar Singh’s TPG-AXON Management LP also made a $59.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Ken Griffin’s Citadel Investment Group, and Jacob Gottlieb’s Visium Asset Management.

How are insiders trading WABCO Holdings Inc. (NYSE:WBC)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time frame, WABCO Holdings Inc. (NYSE:WBC) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to WABCO Holdings Inc. (NYSE:WBC). These stocks are TRW Automotive Holdings Corp. (NYSE:TRW), Visteon Corp (NYSE:VC), LKQ Corporation (NASDAQ:LKQ), Lear Corporation (NYSE:LEA), and Allison Transmission Holdings Inc (NYSE:ALSN). This group of stocks are in the auto parts industry and their market caps are similar to WBC’s market cap.