Lindsay Corporation (LNN): Are Hedge Funds Right About This Stock?

Is Lindsay Corporation (NYSE:LNN) a buy here? Prominent investors are taking an optimistic view. The number of bullish hedge fund bets increased by 2 recently.

To most investors, hedge funds are viewed as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open today, we look at the crème de la crème of this group, around 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their top stock picks, we have identified a few investment strategies that have historically beaten the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as important, bullish insider trading activity is a second way to parse down the world of equities. There are lots of stimuli for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this strategy if investors know what to do (learn more here).

Now, we’re going to take a gander at the key action surrounding Lindsay Corporation (NYSE:LNN).

How have hedgies been trading Lindsay Corporation (NYSE:LNN)?

At Q1’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 12% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Lindsay Corporation (NYSE:LNN). Royce & Associates has a $23.6 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Vinik Asset Management, managed by Jeffrey Vinik, which held a $17.2 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Michael Kaufman’s MAK Capital One, Mario Gabelli’s GAMCO Investors and Jim Simons’s Renaissance Technologies.

As aggregate interest increased, specific money managers have jumped into Lindsay Corporation (NYSE:LNN) headfirst. Vinik Asset Management, managed by Jeffrey Vinik, established the most valuable position in Lindsay Corporation (NYSE:LNN). Vinik Asset Management had 17.2 million invested in the company at the end of the quarter. Ron Gutfleish’s Elm Ridge Capital also made a $2 million investment in the stock during the quarter. The following funds were also among the new LNN investors: Paul Tudor Jones’s Tudor Investment Corp, Robert B. Gillam’s McKinley Capital Management, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

What do corporate executives and insiders think about Lindsay Corporation (NYSE:LNN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, Lindsay Corporation (NYSE:LNN) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Lindsay Corporation (NYSE:LNN). These stocks are Columbus McKinnon Corp. (NASDAQ:CMCO), Alamo Group, Inc. (NYSE:ALG), Manitowoc Company, Inc. (NYSE:MTW), Cascade Corporation (NYSE:CASC), and Astec Industries, Inc. (NASDAQ:ASTE). This group of stocks belong to the farm & construction machinery industry and their market caps match LNN’s market cap.