Mueller Industries, Inc. (NYSE:MLI) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.
In the eyes of most shareholders, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, we hone in on the upper echelon of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by watching their top picks, we have deciphered a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as important, optimistic insider trading sentiment is another way to break down the investments you’re interested in. As the old adage goes: there are lots of motivations for an insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).
Keeping this in mind, let’s take a peek at the latest action encompassing Mueller Industries, Inc. (NYSE:MLI).
How have hedgies been trading Mueller Industries, Inc. (NYSE:MLI)?
In preparation for this quarter, a total of 21 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Gates Capital Management, managed by Jeffrey Gates, holds the most valuable position in Mueller Industries, Inc. (NYSE:MLI). Gates Capital Management has a $60.8 million position in the stock, comprising 3.2% of its 13F portfolio. The second largest stake is held by Fisher Asset Management, managed by Ken Fisher, which held a $39.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Mario Gabelli’s GAMCO Investors, Chuck Royce’s Royce & Associates and David Cohen and Harold Levy’s Iridian Asset Management.
Because Mueller Industries, Inc. (NYSE:MLI) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds who were dropping their entire stakes last quarter. At the top of the heap, Michael Lowenstein’s Kensico Capital said goodbye to the largest stake of the 450+ funds we key on, valued at an estimated $3.7 million in stock., and Robert Bishop of Impala Asset Management was right behind this move, as the fund dumped about $1.4 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds last quarter.
What have insiders been doing with Mueller Industries, Inc. (NYSE:MLI)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Mueller Industries, Inc. (NYSE:MLI) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Mueller Industries, Inc. (NYSE:MLI). These stocks are Chart Industries, Inc. (NASDAQ:GTLS), Matthews International Corp (NASDAQ:MATW), Worthington Industries, Inc. (NYSE:WOR), Sims Metal Management Ltd (ADR) (NYSE:SMS), and AZZ Incorporated (NYSE:AZZ). This group of stocks are in the metal fabrication industry and their market caps are similar to MLI’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Chart Industries, Inc. (NASDAQ:GTLS)||16||0||6|
|Matthews International Corp (NASDAQ:MATW)||6||0||2|
|Worthington Industries, Inc. (NYSE:WOR)||10||0||5|
|Sims Metal Management Ltd (ADR) (NYSE:SMS)||4||0||0|
|AZZ Incorporated (NYSE:AZZ)||16||1||6|
With the results shown by the aforementioned time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Mueller Industries, Inc. (NYSE:MLI) is no exception.