Hedge Funds Are Betting On Lufkin Industries, Inc. (LUFK)

What’s a smart Lufkin Industries, Inc. (NASDAQ:LUFK) investor to do?

At the moment, there are tons of metrics investors can use to watch the equity markets. A duo of the most innovative 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 fund managers can outclass the market by a solid amount (see just how much).

Just as necessary, optimistic insider trading activity is a second way to analyze the investments you’re interested in. There are a variety of motivations for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).

Now that that’s out of the way, let’s analyze the newest info about Lufkin Industries, Inc. (NASDAQ:LUFK).

How have hedgies been trading Lufkin Industries, Inc. (NASDAQ:LUFK)?

Heading into Q3, a total of 21 of the hedge funds we track were long in this stock, a change of 62% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.

According to our 13F database, Mario Gabelli’s GAMCO Investors had the most valuable position in Lufkin Industries, Inc. (NASDAQ:LUFK), worth close to $112.2 million, comprising 0.7% of its total 13F portfolio. Coming in second is Jane Mendillo of Harvard Management Co, with a $60.2 million position; the fund has 6.5% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Robert Emil Zoellner’s Alpine Associates, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.

Now, particular hedge funds were breaking ground themselves. GAMCO Investors, managed by Mario Gabelli, created the most outsized position in Lufkin Industries, Inc. (NASDAQ:LUFK). GAMCO Investors had 112.2 million invested in the company at the end of the quarter. Jane Mendillo’s Harvard Management Co also made a $60.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Robert Emil Zoellner’s Alpine Associates, Cliff Asness’s AQR Capital Management, and Israel Englander’s Millennium Management.

How have insiders been trading Lufkin Industries, Inc. (NASDAQ:LUFK)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last six-month time frame, Lufkin Industries, Inc. (NASDAQ:LUFK) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Lufkin Industries, Inc. (NASDAQ:LUFK). These stocks are Forum Energy Technologies Inc (NYSE:FET), Precision Drilling Corp (USA) (NYSE:PDS), Helix Energy Solutions Group Inc. (NYSE:HLX), CARBO Ceramics Inc. (NYSE:CRR), and Energy XXI (Bermuda) Limited (NASDAQ:EXXI). All of these stocks are in the oil & gas equipment & services industry and their market caps are similar to LUFK’s market cap.