Is Terex Corporation (NYSE:TEX) a first-rate investment now? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
At the moment, there are plenty of methods investors can use to analyze Mr. Market. A duo of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can beat their index-focused peers by a solid margin (see just how much).
Just as key, optimistic insider trading activity is a second way to parse down the financial markets. Obviously, there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).
Keeping this in mind, let’s take a peek at the recent action encompassing Terex Corporation (NYSE:TEX).
Hedge fund activity in Terex Corporation (NYSE:TEX)
At year’s end, a total of 26 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Pennant Capital Management, managed by Alan Fournier, holds the most valuable position in Terex Corporation (NYSE:TEX). Pennant Capital Management has a $277 million position in the stock, comprising 5.8% of its 13F portfolio. Sitting at the No. 2 spot is Partner Fund Management, managed by Christopher MedlockáJames, which held a $41 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Robert Bishop’s Impala Asset Management, Robert Pohly’s Samlyn Capital and Ron Gutfleish’s Elm Ridge Capital.
Due to the fact that Terex Corporation (NYSE:TEX) has faced a declination in interest from hedge fund managers, it’s easy to see that there exists a select few funds that slashed their entire stakes at the end of the year. At the top of the heap, Israel Englander’s Millennium Management sold off the largest stake of the 450+ funds we monitor, worth about $17 million in stock.. Mario Gabelli’s fund, GAMCO Investors, also sold off its stock, about $2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Terex Corporation (NYSE:TEX)?
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, Terex Corporation (NYSE:TEX) has seen 3 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
With the results shown by the aforementioned strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Terex Corporation (NYSE:TEX) is no exception.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.