Titan Machinery Inc. (TITN): Are Hedge Funds Right About This Stock?

Titan Machinery Inc. (NASDAQ:TITN) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. TITN investors should be aware of a decrease in hedge fund interest of late. There were 13 hedge funds in our database with TITN holdings at the end of the previous quarter.

Titan Machinery Inc. (TITN)

To most stock holders, hedge funds are perceived as worthless, old investment tools of years past. While there are more than 8000 funds trading at the moment, we look at the leaders of this group, around 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total capital, and by watching their top investments, we have discovered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as important, bullish insider trading activity is a second way to parse down the world of equities. There are a number of stimuli for an insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action regarding Titan Machinery Inc. (NASDAQ:TITN).

What does the smart money think about Titan Machinery Inc. (NASDAQ:TITN)?

Heading into 2013, a total of 12 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, David Keidan’s Buckingham Capital Management had the most valuable position in Titan Machinery Inc. (NASDAQ:TITN), worth close to $7.9 million, comprising 0.6% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $6.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Richard Driehaus’s Driehaus Capital, Ken Brodkowitz and Mike Vermut’s Newland Capital and Jay Petschek and Steven Major’s Corsair Capital Management.

Because Titan Machinery Inc. (NASDAQ:TITN) has faced bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of funds who were dropping their full holdings heading into 2013. At the top of the heap, Philip Hempleman’s Ardsley Partners said goodbye to the largest position of the “upper crust” of funds we track, comprising about $6.6 million in stock., and “Richard S. Meisenberg of ACK Asset Management was right behind this move, as the fund said goodbye to about $2.4 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds heading into 2013.

How are insiders trading Titan Machinery Inc. (NASDAQ:TITN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has seen transactions within the past six months. Over the latest half-year time frame, Titan Machinery Inc. (NASDAQ:TITN) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Titan Machinery Inc. (NASDAQ:TITN). These stocks are Barnes & Noble, Inc. (NYSE:BKS), Zumiez Inc. (NASDAQ:ZUMZ), Brown Shoe Company, Inc. (NYSE:BWS), American Greetings Corporation (NYSE:AM), and United Online, Inc. (NASDAQ:UNTD). This group of stocks belong to the specialty retail, other industry and their market caps match TITN’s market cap.