What’s a smart Smith & Wesson Holding Corporation (NASDAQ:SWHC) investor to do?
To the average investor, there are dozens of metrics investors can use to analyze Mr. Market. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the market by a significant amount (see just how much).
Equally as useful, positive insider trading sentiment is another way to analyze the marketplace. Obviously, there are lots of incentives for an executive to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).
Furthermore, we’re going to analyze the recent info about Smith & Wesson Holding Corporation (NASDAQ:SWHC).
How are hedge funds trading Smith & Wesson Holding Corporation (NASDAQ:SWHC)?
Heading into Q3, a total of 20 of the hedge funds we track were bullish in this stock, a change of -5% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
When using filings from the hedgies we track, Peter S. Park’s Park West Asset Management had the biggest position in Smith & Wesson Holding Corporation (NASDAQ:SWHC), worth close to $16 million, comprising 1.9% of its total 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $5.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Gilchrist Berg’s Water Street Capital and Joel Greenblatt’s Gotham Asset Management.
Judging by the fact that Smith & Wesson Holding Corporation (NASDAQ:SWHC) has witnessed bearish sentiment from the smart money’s best and brightest, it’s easy to see that there exists a select few funds who were dropping their full holdings in Q1. At the top of the heap, D. E. Shaw’s D E Shaw said goodbye to the largest position of all the hedgies we track, valued at about $1.7 million in stock, and Israel Englander of Catapult Capital Management was right behind this move, as the fund dumped about $0.5 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds in Q1.
How are insiders trading Smith & Wesson Holding Corporation (NASDAQ:SWHC)?
Bullish insider trading is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest six-month time period, Smith & Wesson Holding Corporation (NASDAQ:SWHC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Smith & Wesson Holding Corporation (NASDAQ:SWHC). These stocks are Kaman Corporation (NYSE:KAMN), AeroVironment, Inc. (NASDAQ:AVAV), TASER International, Inc. (NASDAQ:TASR), Astronics Corporation (NASDAQ:ATRO), and AAR Corp. (NYSE:AIR). All of these stocks are in the aerospace/defense products & services industry and their market caps resemble SWHC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Kaman Corporation (NYSE:KAMN) | 10 | 0 | 0 |
| AeroVironment, Inc. (NASDAQ:AVAV) | 6 | 0 | 0 |
| TASER International, Inc. (NASDAQ:TASR) | 14 | 0 | 0 |
| Astronics Corporation (NASDAQ:ATRO) | 13 | 0 | 0 |
| AAR Corp. (NYSE:AIR) | 15 | 0 | 0 |
Using the results shown by the previously mentioned studies, regular investors should always pay attention to hedge fund and insider trading sentiment, and Smith & Wesson Holding Corporation (NASDAQ:SWHC) shareholders fit into this picture quite nicely.
