If you’d ask most market participants, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at present, we choose to focus on the masters of this club, about 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by watching their highest performing picks, we have deciphered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, optimistic insider trading activity is another way to break down the stock market universe. There are plenty of incentives for an insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).
Consequently, let’s take a peek at the key action encompassing Astec Industries, Inc. (NASDAQ:ASTE).
How have hedgies been trading Astec Industries, Inc. (NASDAQ:ASTE)?
At Q1’s end, a total of 8 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in Astec Industries, Inc. (NASDAQ:ASTE), worth close to $23 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Mario Gabelli of GAMCO Investors, with a $8.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Irving Kahn’s Kahn Brothers, Ken Griffin’s Citadel Investment Group and Matthew Hulsizer’s PEAK6 Capital Management.
Seeing as Astec Industries, Inc. (NASDAQ:ASTE) has experienced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedge funds who were dropping their full holdings at the end of the first quarter. It’s worth mentioning that Drew Cupps’s Cupps Capital Management dropped the biggest position of the “upper crust” of funds we monitor, comprising an estimated $1.2 million in stock. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Astec Industries, Inc. (NASDAQ:ASTE)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the latest half-year time period, Astec Industries, Inc. (NASDAQ:ASTE) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Astec Industries, Inc. (NASDAQ:ASTE). These stocks are NACCO Industries, Inc. (NYSE:NC), Columbus McKinnon Corp. (NASDAQ:CMCO), Alamo Group, Inc. (NYSE:ALG), Lindsay Corporation (NYSE:LNN), and Cascade Corporation (NYSE:CASC). This group of stocks are the members of the farm & construction machinery industry and their market caps resemble ASTE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| NACCO Industries, Inc. (NYSE:NC) | 8 | 0 | 1 |
| Columbus McKinnon Corp. (NASDAQ:CMCO) | 10 | 0 | 0 |
| Alamo Group, Inc. (NYSE:ALG) | 9 | 0 | 4 |
| Lindsay Corporation (NYSE:LNN) | 19 | 0 | 3 |
| Cascade Corporation (NYSE:CASC) | 8 | 0 | 1 |
With the results demonstrated by our strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Astec Industries, Inc. (NASDAQ:ASTE) is an important part of this process.
