Hedge Funds Are Selling Valmont Industries, Inc. (VMI)

Is Valmont Industries, Inc. (NYSE:VMI) a bargain? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund positions fell by 2 lately.

In the 21st century investor’s toolkit, there are plenty of methods shareholders can use to watch Mr. Market. A duo 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 top picks of the elite investment managers can outpace the S&P 500 by a superb amount (see just how much).

Equally as important, optimistic insider trading activity is another way to break down the world of equities. As the old adage goes: there are plenty of reasons for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if investors understand what to do (learn more here).

Now, we’re going to take a gander at the key action encompassing Valmont Industries, Inc. (NYSE:VMI).

What does the smart money think about Valmont Industries, Inc. (NYSE:VMI)?

At the end of the first quarter, a total of 21 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Valmont Industries, Inc. (NYSE:VMI), worth close to $230.1 million, comprising 0.7% of its total 13F portfolio. On Royce & Associates’s heels is Jeffrey Vinik of Vinik Asset Management, with a $56.6 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Judging by the fact that Valmont Industries, Inc. (NYSE:VMI) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers who were dropping their entire stakes in Q1. At the top of the heap, Ken Brodkowitz and Mike Vermut’s Newland Capital dropped the largest position of the 450+ funds we watch, totaling an estimated $0.7 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund cut about $0.6 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds in Q1.

Insider trading activity in Valmont Industries, Inc. (NYSE:VMI)

Insider buying is best served when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time frame, Valmont Industries, Inc. (NYSE:VMI) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Valmont Industries, Inc. (NYSE:VMI). These stocks are Worthington Industries, Inc. (NYSE:WOR), Chart Industries, Inc. (NASDAQ:GTLS), Carpenter Technology Corporation (NYSE:CRS), Reliance Steel & Aluminum (NYSE:RS), and Allegheny Technologies Incorporated (NYSE:ATI). This group of stocks belong to the metal fabrication industry and their market caps are closest to VMI’s market cap.

With the returns shown by our research, everyday investors should always monitor hedge fund and insider trading sentiment, and Valmont Industries, Inc. (NYSE:VMI) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds