ABM Industries, Inc. (ABM): Are Hedge Funds Right About This Stock?

ABM Industries, Inc. (NYSE:ABM) was in 10 hedge funds’ portfolio at the end of December. ABM has seen an increase in hedge fund sentiment recently. There were 7 hedge funds in our database with ABM positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are plenty of metrics market participants can use to watch Mr. Market. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform their index-focused peers by a significant margin (see just how much).

Equally as integral, bullish insider trading activity is another way to break down the marketplace. There are many stimuli for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).

Consequently, we’re going to take a peek at the latest action encompassing ABM Industries, Inc. (NYSE:ABM).

What does the smart money think about ABM Industries, Inc. (NYSE:ABM)?

Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of 43% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

Of the funds we track, David Dreman’s Dreman Value Management had the most valuable position in ABM Industries, Inc. (NYSE:ABM), worth close to $14.7 million, comprising 0.4% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $14.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Consequently, some big names have jumped into ABM Industries, Inc. (NYSE:ABM) headfirst. Renaissance Technologies, managed by Jim Simons, established the most valuable position in ABM Industries, Inc. (NYSE:ABM). Renaissance Technologies had 3.6 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also made a $0.8 million investment in the stock during the quarter. The only other fund with a brand new ABM position is D. E. Shaw’s D E Shaw.

What have insiders been doing with ABM Industries, Inc. (NYSE:ABM)?

Insider buying is best served when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, ABM Industries, Inc. (NYSE:ABM) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to ABM Industries, Inc. (NYSE:ABM). These stocks are Quad/Graphics, Inc. (NYSE:QUAD), Atlas Resource Partners, L.P. (NYSE:ARP), Interval Leisure Group, Inc. (NASDAQ:IILG), Cardtronics, Inc. (NASDAQ:CATM), and Heartland Payment Systems, Inc. (NYSE:HPY). This group of stocks are in the business services industry and their market caps are similar to ABM’s market cap.