Badger Meter, Inc. (BMI): Are Hedge Funds Right About This Stock?

Badger Meter, Inc. (NYSE:BMI) was in 5 hedge funds’ portfolio at the end of the first quarter of 2013. BMI has experienced a decrease in hedge fund interest lately. There were 8 hedge funds in our database with BMI holdings at the end of the previous quarter.

To the average investor, there are a multitude of indicators shareholders can use to monitor publicly traded companies. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can trounce the broader indices by a very impressive margin (see just how much).

Just as key, optimistic insider trading sentiment is a second way to break down the world of equities. As the old adage goes: there are a number of incentives for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this tactic if “monkeys” know what to do (learn more here).

Consequently, we’re going to take a glance at the latest action surrounding Badger Meter, Inc. (NYSE:BMI).

How are hedge funds trading Badger Meter, Inc. (NYSE:BMI)?

At the end of the first quarter, a total of 5 of the hedge funds we track were long in this stock, a change of -38% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Badger Meter, Inc. (NYSE:BMI). Royce & Associates has a $14.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $5.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Matthew Hulsizer’s PEAK6 Capital Management, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group.

Due to the fact that Badger Meter, Inc. (NYSE:BMI) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of funds that slashed their positions entirely at the end of the first quarter. At the top of the heap, Ian Simm’s Impax Asset Management dropped the biggest stake of the “upper crust” of funds we key on, worth an estimated $14.3 million in stock.. Jim Simons’s fund, Renaissance Technologies, also cut its stock, about $0.9 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds at the end of the first quarter.

How are insiders trading Badger Meter, Inc. (NYSE:BMI)?

Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Badger Meter, Inc. (NYSE:BMI) has experienced zero unique insiders buying, and 12 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Badger Meter, Inc. (NYSE:BMI). These stocks are Analogic Corporation (NASDAQ:ALOG), Measurement Specialties, Inc. (NASDAQ:MEAS), MTS Systems Corporation (NASDAQ:MTSC), FARO Technologies, Inc. (NASDAQ:FARO), and Rofin-Sinar Technologies (NASDAQ:RSTI). This group of stocks belong to the scientific & technical instruments industry and their market caps resemble BMI’s market cap.

With the returns exhibited by Insider Monkey’s strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Badger Meter, Inc. (NYSE:BMI) applies perfectly to this mantra.

Click here to learn why you should track hedge funds