Is TriMas Corp (NASDAQ:TRS) a cheap stock to buy now? The best stock pickers are buying. The number of bullish hedge fund positions inched up by 6 lately.
To most market participants, hedge funds are perceived as unimportant, old financial vehicles of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this club, around 450 funds. It is estimated that this group oversees the majority of the smart money’s total asset base, and by monitoring their best investments, we have deciphered a few 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 annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, positive insider trading sentiment is another way to break down the financial markets. Obviously, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if you know where to look (learn more here).
With these “truths” under our belt, we’re going to take a peek at the key action surrounding TriMas Corp (NASDAQ:TRS).
How are hedge funds trading TriMas Corp (NASDAQ:TRS)?
In preparation for this quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 86% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Ric Dillon’s Diamond Hill Capital had the most valuable position in TriMas Corp (NASDAQ:TRS), worth close to $12.8 million, comprising 0.1% of its total 13F portfolio. On Diamond Hill Capital’s heels is D E Shaw, managed by D. E. Shaw, which held a $10 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jacob Gottlieb’s Visium Asset Management and Jim Simons’s Renaissance Technologies.
Consequently, some big names have been driving this bullishness. Diamond Hill Capital, managed by Ric Dillon, initiated the biggest position in TriMas Corp (NASDAQ:TRS). Diamond Hill Capital had 12.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $3.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Israel Englander’s Millennium Management, and Cliff Asness’s AQR Capital Management.
How have insiders been trading TriMas Corp (NASDAQ:TRS)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time frame, TriMas Corp (NASDAQ:TRS) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to TriMas Corp (NASDAQ:TRS). These stocks are Sun Hydraulics Corporation (NASDAQ:SNHY), Mueller Water Products, Inc. (NYSE:MWA), Watts Water Technologies Inc (NYSE:WTS), Barnes Group Inc. (NYSE:B), and EnPro Industries, Inc. (NYSE:NPO). All of these stocks are in the industrial equipment & components industry and their market caps are similar to TRS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Sun Hydraulics Corporation (NASDAQ:SNHY)||5||0||3|
|Mueller Water Products, Inc. (NYSE:MWA)||31||3||1|
|Watts Water Technologies Inc (NYSE:WTS)||10||0||3|
|Barnes Group Inc. (NYSE:B)||13||0||4|
|EnPro Industries, Inc. (NYSE:NPO)||17||1||1|
With the returns shown by our time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and TriMas Corp (NASDAQ:TRS) shareholders fit into this picture quite nicely.