Should You Avoid NACCO Industries, Inc. (NC)?

NACCO Industries, Inc. (NYSE:NC) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. NC has seen a decrease in hedge fund interest in recent months. There were 11 hedge funds in our database with NC holdings at the end of the previous quarter.

NACCO Industries, Inc. (NYSE:NC)

At the moment, there are tons of methods market participants can use to watch stocks. A duo of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass their index-focused peers by a solid margin (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to break down the world of equities. There are a number of stimuli for an executive to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if you know where to look (learn more here).

Now, we’re going to take a peek at the key action regarding NACCO Industries, Inc. (NYSE:NC).

How have hedgies been trading NACCO Industries, Inc. (NYSE:NC)?

Heading into 2013, a total of 8 of the hedge funds we track were long in this stock, a change of -27% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Cliff Asness’s AQR Capital Management had the biggest position in NACCO Industries, Inc. (NYSE:NC), worth close to $5.9 million, accounting for less than 0.1%% of its total 13F portfolio. On AQR Capital Management’s heels is David Dreman of Dreman Value Management, with a $2.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Neil Chriss’s Hutchin Hill Capital.

Due to the fact that NACCO Industries, Inc. (NYSE:NC) has faced a declination in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their positions entirely heading into 2013. At the top of the heap, Ric Dillon’s Diamond Hill Capital sold off the largest investment of the 450+ funds we key on, worth close to $11.5 million in stock.. Wilmot B. Harkey and Daniel Mack’s fund, Nantahala Capital Management, also dropped its stock, about $7.5 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds heading into 2013.

Insider trading activity in NACCO Industries, Inc. (NYSE:NC)

Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the last 180-day time period, NACCO Industries, Inc. (NYSE:NC) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to NACCO Industries, Inc. (NYSE:NC). These stocks are Lindsay Corporation (NYSE:LNN), Astec Industries, Inc. (NASDAQ:ASTE), Cascade Corporation (NYSE:CASC), Alamo Group, Inc. (NYSE:ALG), and Columbus McKinnon Corp. (NASDAQ:CMCO). This group of stocks belong to the farm & construction machinery industry and their market caps are similar to NC’s market cap.