In the eyes of most shareholders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are over 8000 funds in operation today, we at Insider Monkey choose to focus on the bigwigs of this group, close to 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by keeping an eye on their top investments, we have discovered a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, bullish insider trading activity is another way to break down the world of equities. Obviously, there are plenty of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Consequently, let’s take a gander at the key action encompassing IDEX Corporation (NYSE:IEX).
What have hedge funds been doing with IDEX Corporation (NYSE:IEX)?
At Q1’s end, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, John W. Rogers’s Ariel Investments had the biggest position in IDEX Corporation (NYSE:IEX), worth close to $77.5 million, comprising 1.3% of its total 13F portfolio. On Ariel Investments’s heels is GAMCO Investors, managed by Mario Gabelli, which held a $74.2 million position; 0.5% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Chuck Royce’s Royce & Associates and Ken Grossman and Glen Schneider’s SG Capital Management.
Due to the fact that IDEX Corporation (NYSE:IEX) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there exists a select few fund managers that slashed their positions entirely last quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest investment of the “upper crust” of funds we track, valued at about $35.3 million in stock., and Ian Simm of Impax Asset Management was right behind this move, as the fund cut about $8.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
How are insiders trading IDEX Corporation (NYSE:IEX)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time frame, IDEX Corporation (NYSE:IEX) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to IDEX Corporation (NYSE:IEX). These stocks are Xylem Inc (NYSE:XYL), Dresser-Rand Group Inc. (NYSE:DRC), Nordson Corporation (NASDAQ:NDSN), Avery Dennison Corp (NYSE:AVY), and Colfax Corp (NYSE:CFX). This group of stocks are the members of the diversified machinery industry and their market caps match IEX’s market cap.
