Is it smart to be bullish on A. O. Smith Corporation (NYSE:AOS)?
At the moment, there are tons of methods market participants can use to monitor Mr. Market. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can outpace the broader indices by a solid margin (see just how much).
Just as necessary, bullish insider trading activity is a second way to analyze the world of equities. There are a number of stimuli for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).
Thus, let’s examine the latest info about A. O. Smith Corporation (NYSE:AOS).
What does the smart money think about A. O. Smith Corporation (NYSE:AOS)?
Heading into Q3, a total of 24 of the hedge funds we track were bullish in this stock, a change of 118% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially.
When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in A. O. Smith Corporation (NYSE:AOS), worth close to $36.1 million, accounting for 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Columbus Circle Investors, managed by Donald Chiboucis, which held a $35 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
As industrywide interest increased, particular hedge funds were leading the bulls’ herd. Royce & Associates, managed by Chuck Royce, assembled the most outsized position in A. O. Smith Corporation (NYSE:AOS). Royce & Associates had 36.1 million invested in the company at the end of the quarter. Donald Chiboucis’s Columbus Circle Investors also made a $35 million investment in the stock during the quarter. The following funds were also among the new AOS investors: Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw, and Cliff Asness’s AQR Capital Management.
Insider trading activity in A. O. Smith Corporation (NYSE:AOS)
Bullish insider trading is most useful when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, A. O. Smith Corporation (NYSE:AOS) has seen zero unique insiders purchasing, 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 A. O. Smith Corporation (NYSE:AOS). These stocks are General Cable Corporation (NYSE:BGC), EnerSys (NYSE:ENS), Belden Inc. (NYSE:BDC), Woodward Inc (NASDAQ:WWD), and REGAL-BELOIT CORPORATION (NYSE:RBC). This group of stocks are in the industrial electrical equipment industry and their market caps resemble AOS’s market cap.