Do Hedge Funds and Insiders Love Twin Disc, Incorporated (TWIN)?

Twin Disc, Incorporated (NASDAQ:TWIN) investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months.

If you’d ask most shareholders, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we hone in on the crème de la crème of this club, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by paying attention to their top picks, we have spotted a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 (explore the details and some picks here).

Just as beneficial, bullish insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are a number of motivations for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).

Now, we’re going to take a peek at the recent action encompassing Twin Disc, Incorporated (NASDAQ:TWIN).

How have hedgies been trading Twin Disc, Incorporated (NASDAQ:TWIN)?

Heading into Q2, a total of 5 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

Of the funds we track, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Twin Disc, Incorporated (NASDAQ:TWIN). GAMCO Investors has a $18.2 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Gotham Asset Management, managed by Joel Greenblatt, which held a $1.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.

Seeing as Twin Disc, Incorporated (NASDAQ:TWIN) has faced declining sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds that decided to sell off their positions entirely heading into Q2. It’s worth mentioning that Jim Simons’s Renaissance Technologies sold off the biggest investment of all the hedgies we watch, valued at close to $0.2 million in stock. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Twin Disc, Incorporated (NASDAQ:TWIN)?

Insider buying is best served when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time period, Twin Disc, Incorporated (NASDAQ:TWIN) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Twin Disc, Incorporated (NASDAQ:TWIN). These stocks are Flow International Corporation (NASDAQ:FLOW), Ampco-Pittsburgh Corp. (NYSE:AP), Global Power Equipment Group Inc (NASDAQ:GLPW), Kadant Inc. (NYSE:KAI), and Marine Products Corp. (NYSE:MPX). This group of stocks belong to the diversified machinery industry and their market caps are similar to TWIN’s market cap.