Hedge Funds Are Crazy About Lowe’s Companies, Inc. (LOW)

Lowe’s Companies, Inc. (NYSE:LOW) has experienced an increase in hedge fund sentiment in recent months.

In the 21st century investor’s toolkit, there are dozens of methods market participants can use to watch publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can outclass the broader indices by a very impressive margin (see just how much).

Equally as integral, positive insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of reasons for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

Consequently, let’s take a peek at the recent action surrounding Lowe’s Companies, Inc. (NYSE:LOW).

How are hedge funds trading Lowe’s Companies, Inc. (NYSE:LOW)?

In preparation for this quarter, a total of 55 of the hedge funds we track were bullish in this stock, a change of 17% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.

Of the funds we track, Greenhaven Associates, managed by Edgar Wachenheim, holds the most valuable position in Lowe’s Companies, Inc. (NYSE:LOW). Greenhaven Associates has a $454.9 million position in the stock, comprising 12.4% of its 13F portfolio. Coming in second is Iridian Asset Management, managed by David Cohen and Harold Levy, which held a $144.8 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Patrick Degorce’s Theleme Partners and Steven Cohen’s SAC Capital Advisors.

As one would reasonably expect, some big names were breaking ground themselves. Iridian Asset Management, managed by David Cohen and Harold Levy, created the most valuable position in Lowe’s Companies, Inc. (NYSE:LOW). Iridian Asset Management had 144.8 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also made a $123.8 million investment in the stock during the quarter. The other funds with brand new LOW positions are Jim Simons’s Renaissance Technologies, Lee Ainslie’s Maverick Capital, and Louis Bacon’s Moore Global Investments.

Insider trading activity in Lowe’s Companies, Inc. (NYSE:LOW)

Insider buying is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, Lowe’s Companies, Inc. (NYSE:LOW) has experienced zero unique insiders buying, and 11 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Lowe’s Companies, Inc. (NYSE:LOW). These stocks are Orchard Supply Hardware Stores Corp (NASDAQ:OSH), Builders FirstSource, Inc. (NASDAQ:BLDR), Lumber Liquidators Holdings Inc (NYSE:LL), , and The Home Depot, Inc. (NYSE:HD). This group of stocks are in the home improvement stores industry and their market caps are closest to LOW’s market cap.

With the returns exhibited by Insider Monkey’s studies, retail investors should always keep an eye on hedge fund and insider trading activity, and Lowe’s Companies, Inc. (NYSE:LOW) is an important part of this process.

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