Towers Watson & Co (TW): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?
Should smart Towers Watson & Co (NYSE:TW) investors consider tracking the following data?
If you were to ask many market players, hedge funds are perceived as bloated, outdated investment tools of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open in present day, Insider Monkey looks at the upper echelon of this group, around 525 funds. It is widely held that this group has its hands on the lion's share of the hedge fund industry's total assets, and by watching their best picks, we've formulated a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as crucial, positive insider trading sentiment is another way to look at the world of equities. As the old adage goes: there are lots of stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).
Furthermore, let's discuss the latest info for Towers Watson & Co (NYSE:TW).
Hedge fund activity in Towers Watson & Co (NYSE:TW)
In preparation for the third quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of -16% from one quarter earlier. With the smart money's capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Towers Watson & Co (NYSE:TW). Royce & Associates has a $226.2 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Ariel Investments, managed by John W. Rogers, which held a $79 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other peers that are bullish include D. E. Shaw's D E Shaw, Donald Chiboucis's Columbus Circle Investors and Martin D. Sass's MD Sass.
As Towers Watson & Co (NYSE:TW) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds who sold off their entire stakes in Q1. At the top of the heap, Alexander Roepers's Atlantic Investment Management said goodbye to the largest investment of all the hedgies we track, valued at about $5.7 million in stock. Jeffrey Vinik's fund, Vinik Asset Management, also dropped its stock, about $2.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds in Q1.
How are insiders trading Towers Watson & Co (NYSE:TW)?
Insider buying is particularly usable when the company we're looking at has seen transactions within the past 180 days. Over the last six-month time period, Towers Watson & Co (NYSE:TW) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Towers Watson & Co (NYSE:TW). These stocks are FTI Consulting, Inc. (NYSE:FCN), Booz Allen Hamilton Holding Corporation (NYSE:BAH), The Corporate Executive Board Company (NYSE:CEB), Corrections Corp Of America (NYSE:CXW), and Genpact Limited (NYSE:G). This group of stocks belong to the management services industry and their market caps are closest to TW's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
FTI Consulting, Inc. (NYSE:FCN)
Booz Allen Hamilton Holding Corporation (NYSE:BAH)
The Corporate Executive Board Company (NYSE:CEB)
Corrections Corp Of America (NYSE:CXW)
Genpact Limited (NYSE:G)
Using the returns demonstrated by Insider Monkey's studies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and Towers Watson & Co (NYSE:TW) is no exception.