Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

This Metric Says You Are Smart to Sell WABCO Holdings Inc. (WBC)

Is WABCO Holdings Inc. (NYSE:WBC) undervalued? The smart money is reducing their bets on the stock. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience

In the 21st century investor’s toolkit, there are tons of metrics market participants can use to watch stocks. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can trounce their index-focused peers by a superb amount (see just how much).

WABCO Holdings Inc. (NYSE:WBC)

Just as beneficial, optimistic insider trading sentiment is a second way to break down the marketplace. Obviously, there are a number of motivations for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).

Now, let’s take a peek at the key action encompassing WABCO Holdings Inc. (NYSE:WBC).

What does the smart money think about WABCO Holdings Inc. (NYSE:WBC)?

In preparation for this year, a total of 30 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

According to our comprehensive database, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in WABCO Holdings Inc. (NYSE:WBC). Berkshire Hathaway has a $265.4 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Stephen Mandel of Lone Pine Capital, with a $229.1 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Alan Fournier’s Pennant Capital Management, John Griffin’s Blue Ridge Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.

Due to the fact that WABCO Holdings Inc. (NYSE:WBC) has experienced declining sentiment from the smart money, logic holds that there was a specific group of hedgies who were dropping their positions entirely last quarter. At the top of the heap, Jeffrey Tannenbaum’s Fir Tree dumped the largest stake of the “upper crust” of funds we key on, valued at close to $106.3 million in stock.. Robert Rodriguez and Steven Romick’s fund, First Pacific Advisors LLC, also cut its stock, about $49.5 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading WABCO Holdings Inc. (NYSE:WBC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, WABCO Holdings Inc. (NYSE:WBC) has seen zero unique insiders purchasing, and 7 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 WABCO Holdings Inc. (NYSE:WBC). These stocks are TRW Automotive Holdings Corp. (NYSE:TRW), Visteon Corp (NYSE:VC), LKQ Corporation (NASDAQ:LKQ), Lear Corporation (NYSE:LEA), and Allison Transmission Holdings Inc (NYSE:ALSN). This group of stocks are in the auto parts industry and their market caps are similar to WBC’s market cap.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.