Should You Avoid Diebold Incorporated (DBD)?

Is Diebold Incorporated (NYSE:DBD) a good investment?

In the 21st century investor’s toolkit, there are dozens of indicators investors can use to watch publicly traded companies. A pair of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outclass the market by a solid margin (see just how much).

Equally as useful, bullish insider trading activity is a second way to analyze the financial markets. Just as you’d expect, there are a number of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).

What’s more, let’s study the latest info surrounding Diebold Incorporated (NYSE:DBD).

What does the smart money think about Diebold Incorporated (NYSE:DBD)?

In preparation for the third quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -43% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

Diebold Incorporated (NYSE:DBD)When using filings from the hedgies we track, Mario Gabelli’s GAMCO Investors had the biggest position in Diebold Incorporated (NYSE:DBD), worth close to $115.3 million, accounting for 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $49 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Since Diebold Incorporated (NYSE:DBD) has witnessed declining interest from the top-tier hedge fund industry, logic holds that there was a specific group of funds who sold off their entire stakes in Q1. It’s worth mentioning that Jeffrey Smith’s Starboard Value LP said goodbye to the largest investment of the “upper crust” of funds we track, totaling close to $14.4 million in stock. SAC Subsidiary’s fund, Sigma Capital Management, also dumped its stock, about $13.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds in Q1.

How are insiders trading Diebold Incorporated (NYSE:DBD)?

Insider buying made by high-level executives is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, Diebold Incorporated (NYSE:DBD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Diebold Incorporated (NYSE:DBD). These stocks are Progress Software Corporation (NASDAQ:PRGS), Compuware Corporation (NASDAQ:CPWR), Advent Software, Inc. (NASDAQ:ADVS), Manhattan Associates, Inc. (NASDAQ:MANH), and RealPage, Inc. (NASDAQ:RP). This group of stocks belong to the application software industry and their market caps are closest to DBD’s market cap.