Is Lennox International Inc. (NYSE:LII) going to take off soon? Money managers are getting more optimistic. The number of bullish hedge fund positions moved up by 1 in recent months.
In the eyes of most shareholders, hedge funds are assumed to be slow, old investment vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, we choose to focus on the elite of this group, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total asset base, and by keeping an eye on their best stock picks, we have unsheathed a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as beneficial, bullish insider trading activity is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of motivations for an executive to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this tactic if you know where to look (learn more here).
Keeping this in mind, it’s important to take a look at the key action encompassing Lennox International Inc. (NYSE:LII).
What does the smart money think about Lennox International Inc. (NYSE:LII)?
In preparation for this quarter, a total of 17 of the hedge funds we track were long in this stock, a change of 6% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in Lennox International Inc. (NYSE:LII). Select Equity Group has a $72.5 million position in the stock, comprising 1% of its 13F portfolio. On Select Equity Group’s heels is Greenhaven Associates, managed by Edgar Wachenheim, which held a $25.8 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Andrew Sandler’s Sandler Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’s Renaissance Technologies.
Consequently, specific money managers have jumped into Lennox International Inc. (NYSE:LII) headfirst. Select Equity Group, managed by Robert Joseph Caruso, created the largest position in Lennox International Inc. (NYSE:LII). Select Equity Group had 72.5 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also initiated a $25.7 million position during the quarter. The other funds with brand new LII positions are Alexander Mitchell’s Scopus Asset Management, Joel Greenblatt’s Gotham Asset Management, and Mike Vranos’s Ellington.
What do corporate executives and insiders think about Lennox International Inc. (NYSE:LII)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Lennox International Inc. (NYSE:LII) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Lennox International Inc. (NYSE:LII). These stocks are The Middleby Corporation (NASDAQ:MIDD), Graco Inc. (NYSE:GGG), 3D Systems Corporation (NYSE:DDD), Babcock & Wilcox Co (NYSE:BWC), and Crane Co. (NYSE:CR). This group of stocks are the members of the diversified machinery industry and their market caps are closest to LII’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| The Middleby Corporation (NASDAQ:MIDD) | 20 | 0 | 2 |
| Graco Inc. (NYSE:GGG) | 12 | 0 | 12 |
| 3D Systems Corporation (NYSE:DDD) | 12 | 0 | 6 |
| Babcock & Wilcox Co (NYSE:BWC) | 27 | 1 | 1 |
| Crane Co. (NYSE:CR) | 25 | 0 | 9 |
With the returns exhibited by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Lennox International Inc. (NYSE:LII) applies perfectly to this mantra.
