Kennametal Inc. (NYSE:KMT) investors should pay attention to an increase in hedge fund sentiment lately.
In the financial world, there are a multitude of methods market participants can use to monitor publicly traded companies. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a very impressive margin (see just how much).
Equally as key, bullish insider trading sentiment is another way to break down the investments you’re interested in. Obviously, there are a variety of incentives for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).
Now, we’re going to take a glance at the latest action regarding Kennametal Inc. (NYSE:KMT).
How have hedgies been trading Kennametal Inc. (NYSE:KMT)?
In preparation for this quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 7% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Kennametal Inc. (NYSE:KMT). Royce & Associates has a $205.8 million position in the stock, comprising 0.6% of its 13F portfolio. On Royce & Associates’s heels is Third Avenue Management, managed by Martin Whitman, which held a $47.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Ric Dillon’s Diamond Hill Capital, David Keidan’s Buckingham Capital Management and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, some big names were breaking ground themselves. Buckingham Capital Management, managed by David Keidan, initiated the most outsized position in Kennametal Inc. (NYSE:KMT). Buckingham Capital Management had 9.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $5.9 million investment in the stock during the quarter. The other funds with brand new KMT positions are Paul Tudor Jones’s Tudor Investment Corp, Matthew Tewksbury’s Stevens Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
How are insiders trading Kennametal Inc. (NYSE:KMT)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time period, Kennametal Inc. (NYSE:KMT) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Kennametal Inc. (NYSE:KMT). These stocks are Kaydon Corporation (NYSE:KDN), RBC Bearings Incorporated (NASDAQ:ROLL), Proto Labs Inc (NYSE:PRLB), The Timken Company (NYSE:TKR), and MRC Global Inc (NYSE:MRC). This group of stocks are the members of the machine tools & accessories industry and their market caps match KMT’s market cap.