Did Hedge Funds and Insiders Love Gardner Denver, Inc. (GDI)?

Gardner Denver, Inc. (NYSE:GDI) was bought by  KKR & Co in July, but it’s still worth it to look at how the smart money was invested.

To the average investor, there are many indicators investors can use to analyze the equity markets. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can beat the broader indices by a superb amount (see just how much).

Just as key, positive insider trading activity is a second way to analyze the marketplace. There are plenty of incentives for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

Furthermore, let’s analyze the latest info surrounding Gardner Denver, Inc. (NYSE:GDI).

How have hedgies been trading Gardner Denver, Inc. (NYSE:GDI)?

At the end of the second quarter, a total of 33 of the hedge funds we track were bullish in this stock, a change of -11% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.

According to our 13F database, Matthew Halbower’s Pentwater Capital Management had the largest position in Gardner Denver, Inc. (NYSE:GDI), worth close to $143.7 million, comprising 3.1% of its total 13F portfolio. Sitting at the No. 2 spot is Alpine Associates, managed by Robert Emil Zoellner, which held a $137.9 million position; the fund has 5.6% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Mario Gabelli’s GAMCO Investors, John Paulson’s Paulson & Co and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Gardner Denver, Inc. (NYSE:GDI) has experienced a fall in interest from upper-tier hedge fund managers, it’s easy to see that there exists a select few hedgies who sold off their positions entirely heading into Q2. Interestingly, Nick Niell’s Arrowgrass Capital Partners dumped the biggest position of the “upper crust” of funds we monitor, totaling about $41.2 million in stock. Steven Cohen’s fund, SAC Capital Advisors, also dropped its stock, about $37.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds heading into Q2.

How are insiders trading Gardner Denver, Inc. (NYSE:GDI)?

Insider buying is most useful when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, Gardner Denver, Inc. (NYSE:GDI) has experienced zero unique insiders purchasing, and 4 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 Gardner Denver, Inc. (NYSE:GDI). These stocks are Nordson Corporation (NASDAQ:NDSN), Crane Co. (NYSE:CR), Babcock & Wilcox Co (NYSE:BWC), Graco Inc. (NYSE:GGG), and SPX Corporation (NYSE:SPW). All of these stocks are in the diversified machinery industry and their market caps resemble GDI’s market cap.