Is ITT Corp (NYSE:ITT) a good investment?
Now, according to many investors, hedge funds are assumed to be delayed, old investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey focuses on the upper echelon of this group, about 525 funds. It is assumed that this group controls most of all hedge funds’ total assets, and by watching their highest quality picks, we’ve come up with a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as useful, bullish insider trading activity is another way to look at the marketplace. As the old adage goes: there are plenty of stimuli for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).
Thus, let’s study the newest info for ITT Corp (NYSE:ITT).
How are hedge funds trading ITT Corp (NYSE:ITT)?
At the end of the second quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 5% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings considerably.
According to our 13F database, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC had the most valuable position in ITT Corp (NYSE:ITT), worth close to $56.4 million, comprising 0.6% of its total 13F portfolio. Coming in second is Jeffrey Gates of Gates Capital Management, with a $45 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Mario Gabelli’s GAMCO Investors, David Dreman’s Dreman Value Management and Cliff Asness’s AQR Capital Management.
As one would understandably expect, specific money managers were breaking ground themselves. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, initiated the biggest position in ITT Corp (NYSE:ITT). First Pacific Advisors LLC had 56.4 million invested in the company at the end of the quarter. Jeffrey Gates’s Gates Capital Management also made a $45 million investment in the stock during the quarter. The following funds were also among the new ITT investors: Mario Gabelli’s GAMCO Investors, David Dreman’s Dreman Value Management, and Cliff Asness’s AQR Capital Management.
How are insiders trading ITT Corp (NYSE:ITT)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, ITT Corp (NYSE:ITT) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to ITT Corp (NYSE:ITT). These stocks are 3D Systems Corporation (NYSE:DDD), Zebra Technologies Corp. (NASDAQ:ZBRA), The Middleby Corporation (NASDAQ:MIDD), Generac Holdings Inc. (NYSE:GNRC), and Sauer-Danfoss Inc. (NYSE:SHS). This group of stocks are the members of the diversified machinery industry and their market caps are similar to ITT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|3D Systems Corporation (NYSE:DDD)||21||0||0|
|Zebra Technologies Corp. (NASDAQ:ZBRA)||17||0||0|
|The Middleby Corporation (NASDAQ:MIDD)||14||0||0|
|Generac Holdings Inc. (NYSE:GNRC)||24||0||0|
|Sauer-Danfoss Inc. (NYSE:SHS)||0||0|
Using the results shown by our analyses, regular investors should always keep one eye on hedge fund and insider trading sentiment, and ITT Corp (NYSE:ITT) is an important part of this process.