Hedge Funds Are Selling Rockwell Automation (ROK)

Rockwell Automation (NYSE:ROK) investors should pay attention to a decrease in support from the world’s most elite money managers lately.

At the moment, there are plenty of methods market participants can use to monitor stocks. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce their index-focused peers by a very impressive margin (see just how much).

Equally as integral, positive insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are plenty of incentives for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if you understand where to look (learn more here).

Now, let’s take a glance at the latest action surrounding Rockwell Automation (NYSE:ROK).

Hedge fund activity in Rockwell Automation (NYSE:ROK)

In preparation for this quarter, a total of 26 of the hedge funds we track were bullish in this stock, a change of -7% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Christopher Medlock James’s Partner Fund Management had the largest position in Rockwell Automation (NYSE:ROK), worth close to $99.2 million, accounting for 3.3% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $77.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include John A. Levin’s Levin Capital Strategies, Mario Gabelli’s GAMCO Investors and Jim Simons’s Renaissance Technologies.

Judging by the fact that Rockwell Automation (NYSE:ROK) has experienced a declination in interest from the smart money, it’s easy to see that there exists a select few hedgies that decided to sell off their entire stakes in Q1. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management sold off the largest position of the “upper crust” of funds we watch, valued at close to $15.5 million in stock.. Andrew Sandler’s fund, Sandler Capital Management, also dropped its stock, about $12.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds in Q1.

What do corporate executives and insiders think about Rockwell Automation (NYSE:ROK)?

Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, Rockwell Automation (NYSE:ROK) has seen zero unique insiders purchasing, and 16 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 Rockwell Automation (NYSE:ROK). These stocks are A. O. Smith Corporation (NYSE:AOS), REGAL-BELOIT CORPORATION (NYSE:RBC), Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), Nidec Corporation (ADR) (NYSE:NJ), and AMETEK, Inc. (NYSE:AME). All of these stocks are in the industrial electrical equipment industry and their market caps match ROK’s market cap.