L-3 Communications Holdings, Inc. (LLL): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

What’s a smart L-3 Communications Holdings, Inc. (NYSE:LLL) investor to do?

In the 21st century investor’s toolkit, there are tons of metrics investors can use to track stocks. A duo of the best 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 investment managers can beat the market by a superb amount (see just how much).

Equally as crucial, positive insider trading activity is a second way to look at the marketplace. Obviously, there are plenty of incentives for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).

Keeping this in mind, let’s examine the recent info surrounding L-3 Communications Holdings, Inc. (NYSE:LLL).

How are hedge funds trading L-3 Communications Holdings, Inc. (NYSE:LLL)?

At Q2’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.

According to our 13F database, Richard S. Pzena’s Pzena Investment Management had the biggest position in L-3 Communications Holdings, Inc. (NYSE:LLL), worth close to $268 million, accounting for 1.8% of its total 13F portfolio. On Pzena Investment Management’s heels is David Harding of Winton Capital Management, with a $81 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

Due to the fact L-3 Communications Holdings, Inc. (NYSE:LLL) has experienced dropping sentiment from the smart money’s best and brightest, logic holds that there was a specific group of fund managers that elected to cut their full holdings heading into Q2. At the top of the heap, Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest stake of the 450+ funds we watch, totaling an estimated $13.7 million in stock, and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund said goodbye to about $3.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

What do corporate executives and insiders think about L-3 Communications Holdings, Inc. (NYSE:LLL)?

Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, L-3 Communications Holdings, Inc. (NYSE:LLL) 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 L-3 Communications Holdings, Inc. (NYSE:LLL). These stocks are Triumph Group Inc (NYSE:TGI), Rockwell Collins, Inc. (NYSE:COL), B/E Aerospace Inc (NASDAQ:BEAV), Embraer SA (ADR) (NYSE:ERJ), and TransDigm Group Incorporated (NYSE:TDG). This group of stocks are the members of the aerospace/defense products & services industry and their market caps are closest to LLL’s market cap.