Hedge Funds Are Betting On Johnson Controls, Inc. (JCI)

Is Johnson Controls, Inc. (NYSE:JCI) a buy?

In the financial world, there are plenty of methods shareholders can use to track their holdings. A duo of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the market by a solid amount (see just how much).

Just as useful, positive insider trading activity is a second way to analyze the world of equities. Obviously, there are lots of stimuli for an insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if piggybackers know what to do (learn more here).

Furthermore, it’s important to study the newest info about Johnson Controls, Inc. (NYSE:JCI).

Hedge fund activity in Johnson Controls, Inc. (NYSE:JCI)

Heading into Q3, a total of 28 of the hedge funds we track were bullish in this stock, a change of 8% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.

When using filings from the hedgies we track, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Johnson Controls, Inc. (NYSE:JCI). Adage Capital Management has a $197.5 million position in the stock, comprising 0.6% of its 13F portfolio. On Adage Capital Management’s heels is Edinburgh Partners, managed by Sandy Nairn, which held a $170 million position; the fund has 10.1% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Malcolm Fairbairn’s Ascend Capital.

Consequently, certain bigger names were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the largest position in Johnson Controls, Inc. (NYSE:JCI). Adage Capital Management had 197.5 million invested in the company at the end of the quarter. Sandy Nairn’s Edinburgh Partners also initiated a $170 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management, and Malcolm Fairbairn’s Ascend Capital.

What have insiders been doing with Johnson Controls, Inc. (NYSE:JCI)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Johnson Controls, Inc. (NYSE:JCI) has seen zero unique insiders buying, and 6 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 Johnson Controls, Inc. (NYSE:JCI). These stocks are LKQ Corporation (NASDAQ:LKQ), TRW Automotive Holdings Corp. (NYSE:TRW), Autoliv Inc. (NYSE:ALV), BorgWarner Inc. (NYSE:BWA), and Delphi Automotive PLC (NYSE:DLPH). All of these stocks are in the auto parts industry and their market caps are closest to JCI’s market cap.

Using the returns demonstrated by our studies, regular investors should always keep one eye on hedge fund and insider trading activity, and Johnson Controls, Inc. (NYSE:JCI) is no exception.

Discover how hedge fund piggybacking can benefit you