Hedge Funds Are Selling Kaydon Corporation (KDN)

Kaydon Corporation (NYSE:KDN) was in 10 hedge funds’ portfolio at the end of March. KDN has experienced a decrease in enthusiasm from smart money recently. There were 11 hedge funds in our database with KDN positions at the end of the previous quarter.

In today’s marketplace, there are dozens of indicators market participants can use to track publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outperform the S&P 500 by a significant amount (see just how much).

Just as beneficial, optimistic insider trading sentiment is another way to break down the financial markets. Obviously, there are many reasons for an insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this method if piggybackers know where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the key action surrounding Kaydon Corporation (NYSE:KDN).

How are hedge funds trading Kaydon Corporation (NYSE:KDN)?

In preparation for this quarter, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the first quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Kaydon Corporation (NYSE:KDN), worth close to $16.7 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $4.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Ric Dillon’s Diamond Hill Capital.

Seeing as Kaydon Corporation (NYSE:KDN) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that decided to sell off their full holdings last quarter. At the top of the heap, John A. Levin’s Levin Capital Strategies dropped the biggest position of the “upper crust” of funds we watch, worth close to $4.5 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund cut about $0.6 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds last quarter.

How have insiders been trading Kaydon Corporation (NYSE:KDN)?

Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, Kaydon Corporation (NYSE:KDN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Kaydon Corporation (NYSE:KDN). These stocks are MRC Global Inc (NYSE:MRC), Kennametal Inc. (NYSE:KMT), Proto Labs Inc (NYSE:PRLB), RBC Bearings Incorporated (NASDAQ:ROLL), and Blount International, Inc. (NYSE:BLT). This group of stocks are the members of the machine tools & accessories industry and their market caps are similar to KDN’s market cap.

With the results demonstrated by our studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Kaydon Corporation (NYSE:KDN) shareholders fit into this picture quite nicely.

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