Do Hedge Funds and Insiders Love Pall Corporation (PLL)?

Pall Corporation (NYSE:PLL) was in 18 hedge funds’ portfolio at the end of March. PLL investors should pay attention to a decrease in enthusiasm from smart money recently. There were 18 hedge funds in our database with PLL positions at the end of the previous quarter.

In the eyes of most traders, hedge funds are viewed as unimportant, outdated financial tools of yesteryear. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the aristocrats of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the smart money’s total capital, and by keeping an eye on their highest performing investments, we have unearthed a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started 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 the details here).

Equally as integral, optimistic insider trading activity is a second way to parse down the world of equities. Obviously, there are a number of incentives for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this method if investors know where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the latest action surrounding Pall Corporation (NYSE:PLL).

Hedge fund activity in Pall Corporation (NYSE:PLL)

In preparation for this quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably.

When looking at the hedgies we track, Robert Joseph Caruso’s Select Equity Group had the largest position in Pall Corporation (NYSE:PLL), worth close to $179.4 million, accounting for 2.4% of its total 13F portfolio. On Select Equity Group’s heels is Cliff Asness of AQR Capital Management, with a $11.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include David Harding’s Winton Capital Management, Andrew Sandler’s Sandler Capital Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that Pall Corporation (NYSE:PLL) has faced falling interest from the aggregate hedge fund industry, logic holds that there were a few money managers who sold off their positions entirely at the end of the first quarter. It’s worth mentioning that Ian Simm’s Impax Asset Management dumped the largest investment of all the hedgies we watch, totaling an estimated $38.2 million in stock.. Jim Simons’s fund, Renaissance Technologies, also sold off its stock, about $36.7 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Pall Corporation (NYSE:PLL)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time period, Pall Corporation (NYSE:PLL) has experienced 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Pall Corporation (NYSE:PLL). These stocks are Dresser-Rand Group Inc. (NYSE:DRC), Xylem Inc (NYSE:XYL), Pentair, Ltd. Registered Share (NYSE:PNR), and Flowserve Corporation (NYSE:FLS). This group of stocks are the members of the diversified machinery industry and their market caps are similar to PLL’s market cap.

With the results demonstrated by Insider Monkey’s strategies, retail investors should always watch hedge fund and insider trading activity, and Pall Corporation (NYSE:PLL) is no exception.

Click here to learn why you should track hedge funds