Is Griffon Corporation (NYSE:GFF) a marvelous investment right now? Hedge funds are taking an optimistic view. The number of long hedge fund bets rose by 4 in recent months.
To most market participants, hedge funds are seen as worthless, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at present, we choose to focus on the masters of this club, about 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total asset base, and by tracking their best stock picks, we have found a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, bullish insider trading sentiment is another way to parse down the marketplace. Obviously, there are many stimuli for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
With all of this in mind, we’re going to take a gander at the latest action regarding Griffon Corporation (NYSE:GFF).
What does the smart money think about Griffon Corporation (NYSE:GFF)?
In preparation for this quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 44% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in Griffon Corporation (NYSE:GFF). GAMCO Investors has a $76.3 million position in the stock, comprising 0.5% of its 13F portfolio. On GAMCO Investors’s heels is Pzena Investment Management, managed by Richard S. Pzena, which held a $30.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers with similar optimism include Richard S. Meisenberg’s ACK Asset Management, D. E. Shaw’s D E Shaw and Doug Silverman and Alexander Klabin’s Senator Investment Group.
Now, specific money managers were breaking ground themselves. ACK Asset Management, managed by Richard S. Meisenberg, assembled the most valuable position in Griffon Corporation (NYSE:GFF). ACK Asset Management had 4.8 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.3 million position during the quarter. The following funds were also among the new GFF investors: Israel Englander’s Millennium Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and Paul Tudor Jones’s Tudor Investment Corp.
What have insiders been doing with Griffon Corporation (NYSE:GFF)?
Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Griffon Corporation (NYSE:GFF) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Griffon Corporation (NYSE:GFF). These stocks are Trex Company, Inc. (NYSE:TREX), Apogee Enterprises, Inc. (NASDAQ:APOG), Headwaters Inc (NYSE:HW), Universal Forest Products, Inc. (NASDAQ:UFPI), and AAON, Inc. (NASDAQ:AAON). This group of stocks belong to the general building materials industry and their market caps are closest to GFF’s market cap.
