Emerson Electric Co. (EMR): Insiders Aren’t Crazy About It But Hedge Funds Love It

Is Emerson Electric Co. (NYSE:EMR) a buy?

In today’s marketplace, there are dozens of metrics investors can use to watch Mr. Market. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outpace the S&P 500 by a solid amount (see just how much).

Equally as crucial, bullish insider trading sentiment is another way to analyze the stock market universe. Obviously, there are a number of reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).

Now that that’s out of the way, we’re going to discuss the newest info about Emerson Electric Co. (NYSE:EMR).

What does the smart money think about Emerson Electric Co. (NYSE:EMR)?

Heading into Q3, a total of 34 of the hedge funds we track were long in this stock, a change of 10% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly.

Out of the hedge funds we follow, Bill Miller’s Legg Mason Capital Management had the largest position in Emerson Electric Co. (NYSE:EMR), worth close to $58.4 million, accounting for 1% of its total 13F portfolio. On Legg Mason Capital Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $31.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Michael Messner’s Seminole Capital (Investment Mgmt), Ken Griffin’s Citadel Investment Group and David Harding’s Winton Capital Management.

With a general bullishness amongst the titans, specific money managers have jumped into Emerson Electric Co. (NYSE:EMR) headfirst. Legg Mason Capital Management, managed by Bill Miller, assembled the most outsized position in Emerson Electric Co. (NYSE:EMR). Legg Mason Capital Management had 58.4 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $31.3 million position during the quarter. The other funds with brand new EMR positions are Michael Messner’s Seminole Capital (Investment Mgmt), Ken Griffin’s Citadel Investment Group, and David Harding’s Winton Capital Management.

How have insiders been trading Emerson Electric Co. (NYSE:EMR)?

Insider buying is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time frame, Emerson Electric Co. (NYSE:EMR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Emerson Electric Co. (NYSE:EMR). These stocks are EnPro Industries, Inc. (NYSE:NPO), TriMas Corp (NASDAQ:TRS), Barnes Group Inc. (NYSE:B), Watts Water Technologies Inc (NYSE:WTS), and Parker-Hannifin Corporation (NYSE:PH). All of these stocks are in the industrial equipment & components industry and their market caps match EMR’s market cap.