Do Hedge Funds and Insiders Love SPX Corporation (SPW)?

SPX Corporation (NYSE:SPW) investors should pay attention to a decrease in enthusiasm from smart money lately.

In the 21st century investor’s toolkit, there are many gauges shareholders can use to track stocks. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can trounce their index-focused peers by a solid amount (see just how much).

Just as key, positive insider trading sentiment is a second way to break down the world of equities. There are lots of motivations for an insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a look at the latest action surrounding SPX Corporation (NYSE:SPW).

Hedge fund activity in SPX Corporation (NYSE:SPW)

At the end of the first quarter, a total of 16 of the hedge funds we track were long in this stock, a change of -30% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.

Of the funds we track, Ralph V. Whitworth’s Relational Investors had the biggest position in SPX Corporation (NYSE:SPW), worth close to $367.3 million, comprising 7.1% of its total 13F portfolio. Coming in second is Malcolm Fairbairn of Ascend Capital, with a $33.2 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include David Dreman’s Dreman Value Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’s Renaissance Technologies.

Due to the fact that SPX Corporation (NYSE:SPW) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that elected to cut their entire stakes in Q1. It’s worth mentioning that Sanford J. Colen’s Apex Capital dumped the largest stake of the 450+ funds we key on, valued at an estimated $27.6 million in stock., and Sander Gerber of Hudson Bay Capital Management was right behind this move, as the fund dropped about $18.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 7 funds in Q1.

Insider trading activity in SPX Corporation (NYSE:SPW)

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last six-month time frame, SPX Corporation (NYSE:SPW) has seen 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to SPX Corporation (NYSE:SPW). These stocks are Avery Dennison Corp (NYSE:AVY), Babcock & Wilcox Co (NYSE:BWC), Nordson Corporation (NASDAQ:NDSN), Graco Inc. (NYSE:GGG), and Gardner Denver, Inc. (NYSE:GDI). This group of stocks are in the diversified machinery industry and their market caps are closest to SPW’s market cap.

With the returns exhibited by Insider Monkey’s studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and SPX Corporation (NYSE:SPW) is an important part of this process.

Click here to learn why you should track hedge funds