Here is What Hedge Funds Think About Matthews International Corp (MATW)

Is Matthews International Corp (NASDAQ:MATW) a healthy stock for your portfolio? Hedge funds are turning less bullish. The number of bullish hedge fund positions retreated by 3 in recent months.

According to most stock holders, hedge funds are assumed to be underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds trading at present, we at Insider Monkey hone in on the elite of this club, close to 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by tracking their top equity investments, we have come up with a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as important, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are lots of motivations for an executive to cut shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

Consequently, we’re going to take a gander at the key action regarding Matthews International Corp (NASDAQ:MATW).

What have hedge funds been doing with Matthews International Corp (NASDAQ:MATW)?

At Q1’s end, a total of 6 of the hedge funds we track were long in this stock, a change of -33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Matthews International Corp (NASDAQ:MATW). Pzena Investment Management has a $25.5 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Ariel Investments, managed by John W. Rogers, which held a $11.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers with similar optimism include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Mario Gabelli’s GAMCO Investors.

Due to the fact that Matthews International Corp (NASDAQ:MATW) has faced declining sentiment from the smart money, it’s safe to say that there is a sect of fund managers who were dropping their entire stakes in Q1. Intriguingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest investment of the “upper crust” of funds we track, valued at close to $1.7 million in stock.. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds in Q1.

How have insiders been trading Matthews International Corp (NASDAQ:MATW)?

Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time period, Matthews International Corp (NASDAQ:MATW) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Matthews International Corp (NASDAQ:MATW). These stocks are Sims Metal Management Ltd (ADR) (NYSE:SMS), Mueller Industries, Inc. (NYSE:MLI), Haynes International, Inc. (NASDAQ:HAYN), Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), and AZZ Incorporated (NYSE:AZZ). All of these stocks are in the metal fabrication industry and their market caps are similar to MATW’s market cap.

With the results exhibited by our strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Matthews International Corp (NASDAQ:MATW) is an important part of this process.

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