In the financial world, there are many indicators market participants can use to analyze stocks. A duo of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outclass the broader indices by a superb amount (see just how much).
Equally as crucial, optimistic insider trading activity is a second way to analyze the financial markets. As the old adage goes: there are a variety of motivations for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this method if “monkeys” understand where to look (learn more here).
Keeping this in mind, let’s examine the latest info surrounding Nordson Corporation (NASDAQ:NDSN).
Hedge fund activity in Nordson Corporation (NASDAQ:NDSN)
Heading into Q3, a total of 10 of the hedge funds we track were bullish in this stock, a change of -44% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Nordson Corporation (NASDAQ:NDSN). Royce & Associates has a $77.8 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Noam Gottesman of GLG Partners, with a $6.2 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Mario Gabelli’s GAMCO Investors and David Harding’s Winton Capital Management.
Because Nordson Corporation (NASDAQ:NDSN) has faced dropping sentiment from the smart money’s best and brightest, it’s safe to say that there exists a select few money managers that slashed their entire stakes last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies sold off the biggest stake of the “upper crust” of funds we monitor, worth about $17.3 million in stock, and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund cut about $14.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 8 funds last quarter.
Insider trading activity in Nordson Corporation (NASDAQ:NDSN)
Insider buying is best served when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, Nordson Corporation (NASDAQ:NDSN) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Nordson Corporation (NASDAQ:NDSN). These stocks are SPX Corporation (NYSE:SPW), Dresser-Rand Group Inc. (NYSE:DRC), IDEX Corporation (NYSE:IEX), Colfax Corp (NYSE:CFX), and Avery Dennison Corp (NYSE:AVY). This group of stocks are the members of the diversified machinery industry and their market caps are closest to NDSN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| SPX Corporation (NYSE:SPW) | 14 | 0 | 0 |
| Dresser-Rand Group Inc. (NYSE:DRC) | 24 | 0 | 0 |
| IDEX Corporation (NYSE:IEX) | 16 | 0 | 0 |
| Colfax Corp (NYSE:CFX) | 30 | 0 | 0 |
| Avery Dennison Corp (NYSE:AVY) | 18 | 0 | 0 |
Using the returns demonstrated by our tactics, average investors must always track hedge fund and insider trading sentiment, and Nordson Corporation (NASDAQ:NDSN) shareholders fit into this picture quite nicely.
