Hedge Funds Are Dumping Woodward Inc (WWD)
Is Woodward Inc (NASDAQ:WWD) a good investment?
Now, according to many investors, hedge funds are seen as delayed, old financial vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey aim at the upper echelon of this club, around 525 funds. It is widely held that this group has its hands on most of the smart money's total assets, and by paying attention to their highest quality stock picks, we've brought to light a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, positive insider trading activity is another way to analyze the financial markets. As the old adage goes: there are many reasons for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Keeping this in mind, we're going to discuss the latest info surrounding Woodward Inc (NASDAQ:WWD).
What have hedge funds been doing with Woodward Inc (NASDAQ:WWD)?
In preparation for the third quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from one quarter earlier. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.
Out of the hedge funds we follow, Chuck Royce's Royce & Associates had the most valuable position in Woodward Inc (NASDAQ:WWD), worth close to $186 million, accounting for 0.6% of its total 13F portfolio. On Royce & Associates's heels is Legg Mason Capital Management, managed by Bill Miller, which held a $7.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Mario Gabelli's GAMCO Investors, and Ken Griffin's Citadel Investment Group.
As Woodward Inc (NASDAQ:WWD) has experienced declining interest from the entirety of the hedge funds we track, it's easy to see that there exists a select few money managers that slashed their entire stakes heading into Q2. Intriguingly, Jim Simons's Renaissance Technologies dumped the largest position of the "upper crust" of funds we monitor, comprising close to $2.5 million in stock. Steven Cohen's fund, SAC Capital Advisors, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds heading into Q2.
Insider trading activity in Woodward Inc (NASDAQ:WWD)
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Woodward Inc (NASDAQ:WWD) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Woodward Inc (NASDAQ:WWD). These stocks are General Cable Corporation (NYSE:BGC), REGAL-BELOIT CORPORATION (NYSE:RBC), A. O. Smith Corporation (NYSE:AOS), EnerSys (NYSE:ENS), and Belden Inc. (NYSE:BDC). This group of stocks are in the industrial electrical equipment industry and their market caps are similar to WWD's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
General Cable Corporation (NYSE:BGC)
REGAL-BELOIT CORPORATION (NYSE:RBC)
A. O. Smith Corporation (NYSE:AOS)
Belden Inc. (NYSE:BDC)
Using the returns demonstrated by Insider Monkey's studies, average investors must always watch hedge fund and insider trading sentiment, and Woodward Inc (NASDAQ:WWD) is no exception.