Is Lincoln Electric Holdings, Inc. (NASDAQ:LECO) the right pick for your portfolio? Investors who are in the know are turning less bullish. The number of bullish hedge fund positions were cut by 4 in recent months.
In the financial world, there are many gauges market participants can use to analyze their holdings. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outclass the market by a significant margin (see just how much).
Equally as integral, optimistic insider trading activity is another way to break down the marketplace. Obviously, there are lots of motivations for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Consequently, let’s take a look at the recent action encompassing Lincoln Electric Holdings, Inc. (NASDAQ:LECO).
What does the smart money think about Lincoln Electric Holdings, Inc. (NASDAQ:LECO)?
In preparation for this year, a total of 11 of the hedge funds we track were long in this stock, a change of -27% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Lincoln Electric Holdings, Inc. (NASDAQ:LECO). Royce & Associates has a $415.6 million position in the stock, comprising 1.3% of its 13F portfolio. Coming in second is Ken Fisher of Fisher Asset Management, with a $55.4 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and Mario Gabelli’s GAMCO Investors.
Because Lincoln Electric Holdings, Inc. (NASDAQ:LECO) has faced declining sentiment from the smart money, logic holds that there is a sect of fund managers that elected to cut their full holdings heading into 2013. Intriguingly, Phill Gross and Robert Atchinson’s Adage Capital Management dumped the largest position of the “upper crust” of funds we key on, comprising about $13 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $5.9 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into 2013.
How are insiders trading Lincoln Electric Holdings, Inc. (NASDAQ:LECO)?
Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Lincoln Electric Holdings, Inc. (NASDAQ:LECO) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Lincoln Electric Holdings, Inc. (NASDAQ:LECO). These stocks are The Eastern Company (NASDAQ:EML), Simpson Manufacturing Co, Inc. (NYSE:SSD), The Toro Company (NYSE:TTC), Makita Corporation (ADR) (NASDAQ:MKTAY), and Snap-on Incorporated (NYSE:SNA). All of these stocks are in the small tools & accessories industry and their market caps resemble LECO’s market cap.