Armstrong World Industries, Inc. (AWI): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

In today’s marketplace, there are dozens of gauges market participants can use to analyze publicly traded companies. Some of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outperform the broader indices by a very impressive margin (see just how much).

Just as crucial, bullish insider trading sentiment is a second way to analyze the stock market universe. There are lots of incentives for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to discuss the recent info surrounding Armstrong World Industries, Inc. (NYSE:AWI).

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

At the end of the second quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of -25% from the first quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly.

According to our 13F database, Phill Gross and Robert Atchinson’s Adage Capital Management had the largest position in Armstrong World Industries, Inc. (NYSE:AWI), worth close to $112.2 million, comprising 0.3% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which held a $58.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Mariko Gordon’s Daruma Asset Management, Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital and D. E. Shaw’s D E Shaw.

Judging by the fact that Armstrong World Industries, Inc. (NYSE:AWI) has witnessed a fall in interest from the top-tier hedge fund industry, it’s easy to see that there exists a select few fund managers who sold off their entire stakes heading into Q2. Interestingly, Andrew Sandler’s Sandler Capital Management dumped the biggest investment of all the hedgies we watch, valued at an estimated $8.4 million in stock. Richard S. Meisenberg’s fund, ACK Asset Management, also cut its stock, about $6.7 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 5 funds heading into Q2.

Insider trading activity in Armstrong World Industries, Inc. (NYSE:AWI)

Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, Armstrong World Industries, Inc. (NYSE:AWI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Armstrong World Industries, Inc. (NYSE:AWI). These stocks are Masco Corporation (NYSE:MAS), Vulcan Materials Company (NYSE:VMC), Owens Corning (NYSE:OC), Martin Marietta Materials, Inc. (NYSE:MLM), and USG Corporation (NYSE:USG). This group of stocks are the members of the general building materials industry and their market caps match AWI’s market cap.