What’s a smart McDermott International (NYSE:MDR) investor to do?
To the average investor, there are dozens of gauges market participants can use to analyze publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can outpace the market by a healthy margin (see just how much).
Just as useful, bullish insider trading activity is a second way to look at the world of equities. As the old adage goes: there are lots of stimuli for an insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).
Thus, we’re going to examine the newest info surrounding McDermott International (NYSE:MDR).
What have hedge funds been doing with McDermott International (NYSE:MDR)?
Heading into Q3, a total of 29 of the hedge funds we track held long positions in this stock, a change of 61% from the first quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully.
When using filings from the hedgies we track, Barry Rosenstein’s JANA Partners had the most valuable position in McDermott International (NYSE:MDR), worth close to $49.6 million, accounting for 0.7% of its total 13F portfolio. Coming in second is Steven Cohen of SAC Capital Advisors, with a $36.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.
With a general bullishness amongst the titans, specific money managers have been driving this bullishness. JANA Partners, managed by Barry Rosenstein, established the most outsized position in McDermott International (NYSE:MDR). JANA Partners had 49.6 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $36.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management, and D. E. Shaw’s D E Shaw.
How are insiders trading McDermott International (NYSE:MDR)?
Legal insider trading, particularly when it’s bullish, is best served when the company in question has experienced transactions within the past half-year. Over the last half-year time period, McDermott International (NYSE:MDR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to McDermott International (NYSE:MDR). These stocks are Primoris Services Corp (NASDAQ:PRIM), Granite Construction Inc. (NYSE:GVA), Empresas ICA SA (ADR) (NYSE:ICA), MasTec, Inc. (NYSE:MTZ), and Foster Wheeler AG (NASDAQ:FWLT). This group of stocks are the members of the heavy construction industry and their market caps are closest to MDR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Primoris Services Corp (NASDAQ:PRIM)||12||0||0|
|Granite Construction Inc. (NYSE:GVA)||12||0||0|
|Empresas ICA SA (ADR) (NYSE:ICA)||4||0||0|
|MasTec, Inc. (NYSE:MTZ)||20||0||0|
|Foster Wheeler AG (NASDAQ:FWLT)||20||0||0|
Using the returns shown by the previously mentioned studies, regular investors must always watch hedge fund and insider trading sentiment, and McDermott International (NYSE:MDR) shareholders fit into this picture quite nicely.