Hedge Funds Are Buying Terex Corporation (TEX)

Terex Corporation (NYSE:TEX) was in 30 hedge funds’ portfolio at the end of the first quarter of 2013. TEX has experienced an increase in hedge fund sentiment lately. There were 27 hedge funds in our database with TEX holdings at the end of the previous quarter.

To the average investor, there are a multitude of indicators investors can use to track publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can outperform their index-focused peers by a superb amount (see just how much).

Equally as important, positive insider trading activity is a second way to parse down the investments you’re interested in. There are a number of stimuli for an executive to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).

Keeping this in mind, let’s take a glance at the key action regarding Terex Corporation (NYSE:TEX).

How have hedgies been trading Terex Corporation (NYSE:TEX)?

Heading into Q2, a total of 30 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, Alan Fournier’s Pennant Capital Management had the most valuable position in Terex Corporation (NYSE:TEX), worth close to $289.9 million, accounting for 5.6% of its total 13F portfolio. Sitting at the No. 2 spot is Sean Cullinan of Point State Capital, with a $102.9 million position; 1.5% of its 13F portfolio is allocated to the company. Other peers that are bullish include Robert Pohly’s Samlyn Capital, Robert Bishop’s Impala Asset Management and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.

Now, key money managers were leading the bulls’ herd. Point State Capital, managed by Sean Cullinan, created the most valuable position in Terex Corporation (NYSE:TEX). Point State Capital had 102.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $12.4 million investment in the stock during the quarter. The other funds with new positions in the stock are George Soros’s Soros Fund Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and John Fichthorn’s Dialectic Capital Management.

What do corporate executives and insiders think about Terex Corporation (NYSE:TEX)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the last half-year time period, Terex Corporation (NYSE:TEX) has seen 2 unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Terex Corporation (NYSE:TEX). These stocks are Lindsay Corporation (NYSE:LNN), CNH Global NV (ADR) (NYSE:CNH), Joy Global Inc. (NYSE:JOY), Manitowoc Company, Inc. (NYSE:MTW), and AGCO Corporation (NYSE:AGCO). All of these stocks are in the farm & construction machinery industry and their market caps match TEX’s market cap.

With the results shown by Insider Monkey’s time-tested strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Terex Corporation (NYSE:TEX) applies perfectly to this mantra.

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