Alamo Group, Inc. (NYSE:ALG) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. ALG shareholders have witnessed an increase in enthusiasm from smart money of late. There were 6 hedge funds in our database with ALG positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are plenty of gauges market participants can use to analyze Mr. Market. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace the market by a healthy margin (see just how much).
Equally as key, optimistic insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are a number of incentives for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the key action encompassing Alamo Group, Inc. (NYSE:ALG).
Hedge fund activity in Alamo Group, Inc. (NYSE:ALG)
At year’s end, a total of 8 of the hedge funds we track were long in this stock, a change of 33% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.
Of the funds we track, Longview Asset Management, managed by James A. Star, holds the largest position in Alamo Group, Inc. (NYSE:ALG). Longview Asset Management has a $55.5 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $33.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Martin Whitman’s Third Avenue Management, Andy Redleaf’s Whitebox Advisors and Joel Greenblatt’s Gotham Asset Management.
As aggregate interest increased, key money managers were breaking ground themselves. Longview Asset Management, managed by James A. Star, created the most valuable position in Alamo Group, Inc. (NYSE:ALG). Longview Asset Management had 55.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.5 million investment in the stock during the quarter.
What have insiders been doing with Alamo Group, Inc. (NYSE:ALG)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Alamo Group, Inc. (NYSE:ALG) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Alamo Group, Inc. (NYSE:ALG). These stocks are Lindsay Corporation (NYSE:LNN), Astec Industries, Inc. (NASDAQ:ASTE), Cascade Corporation (NYSE:CASC), NACCO Industries, Inc. (NYSE:NC), and Columbus McKinnon Corp. (NASDAQ:CMCO). This group of stocks are in the farm & construction machinery industry and their market caps are closest to ALG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Lindsay Corporation (NYSE:LNN) | 16 | 0 | 5 |
| Astec Industries, Inc. (NASDAQ:ASTE) | 6 | 0 | 2 |
| Cascade Corporation (NYSE:CASC) | 12 | 0 | 1 |
| NACCO Industries, Inc. (NYSE:NC) | 8 | 0 | 1 |
| Columbus McKinnon Corp. (NASDAQ:CMCO) | 9 | 0 | 0 |
With the returns demonstrated by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Alamo Group, Inc. (NYSE:ALG) is no exception.
