Is Mine Safety Appliances (MSA) Going to Burn These Hedge Funds?

Mine Safety Appliances (NYSE:MSA) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. MSA shareholders have witnessed a decrease in hedge fund sentiment lately. There were 12 hedge funds in our database with MSA holdings at the end of the previous quarter.

In the financial world, there are tons of gauges market participants can use to watch the equity markets. A duo of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the S&P 500 by a solid amount (see just how much).

Just as key, bullish insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are many reasons for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).

Consequently, let’s take a gander at the recent action regarding Mine Safety Appliances (NYSE:MSA).

What does the smart money think about Mine Safety Appliances (NYSE:MSA)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -33% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Mine Safety Appliances (NYSE:MSA), worth close to $24.1 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Gregg J. Powers of Private Capital Management, with a $14.1 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Joel Greenblatt’s Gotham Asset Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.

Judging by the fact that Mine Safety Appliances (NYSE:MSA) has faced falling interest from the smart money, logic holds that there is a sect of money managers who sold off their entire stakes at the end of the year. Intriguingly, Mike Vranos’s Ellington sold off the biggest investment of all the hedgies we key on, valued at about $0.3 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 4 funds at the end of the year.

How are insiders trading Mine Safety Appliances (NYSE:MSA)?

Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past 180 days. Over the latest six-month time period, Mine Safety Appliances (NYSE:MSA) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Mine Safety Appliances (NYSE:MSA). These stocks are Cyberonics, Inc. (NASDAQ:CYBX), Globus Medical Inc (NYSE:GMED), Techne Corporation (NASDAQ:TECH), Opko Health Inc. (NYSE:OPK), and STERIS Corp (NYSE:STE). This group of stocks are the members of the medical appliances & equipment industry and their market caps match MSA’s market cap.

With the results shown by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Mine Safety Appliances (NYSE:MSA) is an important part of this process.

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