Here is What Hedge Funds and Insiders Think About Columbus McKinnon Corp. (CMCO)

Should Columbus McKinnon Corp. (NASDAQ:CMCO) investors track the following data?

If you were to ask many of your fellow readers, hedge funds are viewed as useless, old investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey looks at the masters of this club, around 525 funds. It is widely held that this group controls most of the smart money’s total capital, and by keeping an eye on their best picks, we’ve revealed a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, bullish insider trading activity is another way to look at the world of equities. Just as you’d expect, there are a variety of stimuli for a corporate insider to cut 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 impressive potential of this strategy if shareholders know where to look (learn more here).

Now that that’s out of the way, it’s important to examine the latest info for Columbus McKinnon Corp. (NASDAQ:CMCO).

What does the smart money think about Columbus McKinnon Corp. (NASDAQ:CMCO)?

Heading into Q3, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully.

Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the most valuable position in Columbus McKinnon Corp. (NASDAQ:CMCO), worth close to $17.3 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Joel Greenblatt of Gotham Asset Management, with a $2.1 million position; the fund has 0.1% of its 13F portfolio invested in 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 D. E. Shaw’s D E Shaw.

Because Columbus McKinnon Corp. (NASDAQ:CMCO) has faced a fall in interest from the smart money’s best and brightest, it’s easy to see that there was a specific group of funds that elected to cut their full holdings heading into Q2. Interestingly, Richard Driehaus’s Driehaus Capital cut the largest stake of the 450+ funds we monitor, totaling about $0.3 million in stock. Cliff Asness’s fund, AQR Capital Management, also said goodbye to its stock, about $0.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Columbus McKinnon Corp. (NASDAQ:CMCO)?

Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Columbus McKinnon Corp. (NASDAQ:CMCO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Columbus McKinnon Corp. (NASDAQ:CMCO). These stocks are Lindsay Corporation (NYSE:LNN), Astec Industries, Inc. (NASDAQ:ASTE), Cascade Corporation (NYSE:CASC), Alamo Group, Inc. (NYSE:ALG), and NACCO Industries, Inc. (NYSE:NC). This group of stocks are in the farm & construction machinery industry and their market caps match CMCO’s market cap.