Littelfuse, Inc. (NASDAQ:LFUS) investors should be aware of a decrease in hedge fund interest lately.
In the 21st century investor’s toolkit, there are dozens of indicators shareholders can use to track the equity markets. A couple of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outclass the market by a healthy amount (see just how much).
Equally as important, bullish insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are lots of reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).
Keeping this in mind, it’s important to take a look at the recent action surrounding Littelfuse, Inc. (NASDAQ:LFUS).
What does the smart money think about Littelfuse, Inc. (NASDAQ:LFUS)?
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the largest position in Littelfuse, Inc. (NASDAQ:LFUS). Royce & Associates has a $193 million position in the stock, comprising 0.6% of its 13F portfolio. On Royce & Associates’s heels is Ariel Investments, managed by John W. Rogers, which held a $62 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Mario Gabelli’s GAMCO Investors, Joel Greenblatt’s Gotham Asset Management and Cliff Asness’s AQR Capital Management.
Since Littelfuse, Inc. (NASDAQ:LFUS) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers who sold off their positions entirely in Q4. Interestingly, Paul Tudor Jones’s Tudor Investment Corp dropped the biggest stake of the 450+ funds we track, totaling an estimated $0 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Littelfuse, Inc. (NASDAQ:LFUS)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time frame, Littelfuse, Inc. (NASDAQ:LFUS) has seen zero unique insiders buying, and 3 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 Littelfuse, Inc. (NASDAQ:LFUS). These stocks are EnerSys (NYSE:ENS), GrafTech International Ltd (NYSE:GTI), General Cable Corporation (NYSE:BGC), OSI Systems, Inc. (NASDAQ:OSIS), and Franklin Electric Co. (NASDAQ:FELE). All of these stocks are in the industrial electrical equipment industry and their market caps resemble LFUS’s market cap.