Hedge Funds Are Betting On Flow International Corporation (FLOW)

Is Flow International Corporation (NASDAQ:FLOW) a good investment?

Now, according to many market players, hedge funds are viewed as useless, outdated financial vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open currently, this site focuses on the upper echelon of this club, about 525 funds. It is assumed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by monitoring their highest performing investments, we’ve brought to light a number of investment strategies that have historically outpaced the broader indices. 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as key, positive insider trading activity is another way to analyze the financial markets. There are a number of motivations for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).

Now that that’s out of the way, we’re going to analyze the recent info for Flow International Corporation (NASDAQ:FLOW).

Hedge fund activity in Flow International Corporation (NASDAQ:FLOW)

At the end of the second quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 8% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.

When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Flow International Corporation (NASDAQ:FLOW). Royce & Associates has a $11.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Roger Keith Long of Otter Creek Management, with a $8 million position; 1.7% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Michael Doheny’s Freshford Capital Management, Richard S. Meisenberg’s ACK Asset Management and Glenn J. Krevlin’s Glenhill Advisors.

As one would understandably expect, specific money managers were breaking ground themselves. Royce & Associates, managed by Chuck Royce, assembled the most valuable position in Flow International Corporation (NASDAQ:FLOW). Royce & Associates had 11.7 million invested in the company at the end of the quarter. Roger Keith Long’s Otter Creek Management also initiated a $8 million position during the quarter. The following funds were also among the new FLOW investors: Michael Doheny’s Freshford Capital Management, Richard S. Meisenberg’s ACK Asset Management, and Glenn J. Krevlin’s Glenhill Advisors.

How have insiders been trading Flow International Corporation (NASDAQ:FLOW)?

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, Flow International Corporation (NASDAQ:FLOW) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Flow International Corporation (NASDAQ:FLOW). These stocks are China Ming Yang Wind Power Group Ltd (NYSE:MY), Met-Pro Corporation (NYSE:MPR), Manitex International, Inc. (NASDAQ:MNTX), Tecumseh Products Company (NASDAQ:TECUA), and Ampco-Pittsburgh Corp. (NYSE:AP). This group of stocks are in the diversified machinery industry and their market caps are similar to FLOW’s market cap.

Using the returns demonstrated by Insider Monkey’s analyses, average investors should always watch hedge fund and insider trading activity, and Flow International Corporation (NASDAQ:FLOW) applies perfectly to this mantra.

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