Here is What Hedge Funds Think About Flow International Corporation (FLOW)

Is Flow International Corporation (NASDAQ:FLOW) a buy right now? Prominent investors are turning less bullish. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience

To most market participants, hedge funds are perceived as slow, old investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, we look at the leaders of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top equity investments, we have spotted a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are a number of stimuli for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).

With all of this in mind, let’s take a peek at the key action encompassing Flow International Corporation (NASDAQ:FLOW).

How have hedgies been trading Flow International Corporation (NASDAQ:FLOW)?

At the end of the first quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Flow International Corporation (NASDAQ:FLOW). Royce & Associates has a $12.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Roger Keith Long of Otter Creek Management, with a $9.8 million position; 1.8% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Michael Doheny’s Freshford Capital Management, Richard S. Meisenberg’s ACK Asset Management and Glenn J. Krevlin’s Glenhill Advisors.

Judging by the fact that Flow International Corporation (NASDAQ:FLOW) has experienced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers that decided to sell off their full holdings heading into Q2. Interestingly, Philip Hempleman’s Ardsley Partners sold off the biggest position of the 450+ funds we track, totaling about $0.7 million in stock. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Flow International Corporation (NASDAQ:FLOW)

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Flow International Corporation (NASDAQ:FLOW) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the results shown by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading activity, and Flow International Corporation (NASDAQ:FLOW) shareholders fit into this picture quite nicely.

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