Sauer-Danfoss Inc. (SHS): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Is Sauer-Danfoss Inc. (NYSE:SHS) going to take off soon? Money managers are turning less bullish. The number of long hedge fund bets were trimmed by 5 recently.

To the average investor, there are plenty of indicators shareholders can use to track publicly traded companies. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can trounce their index-focused peers by a superb amount (see just how much).

Equally as key, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are lots of incentives for an executive to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

Consequently, it’s important to take a gander at the latest action encompassing Sauer-Danfoss Inc. (NYSE:SHS).

What have hedge funds been doing with Sauer-Danfoss Inc. (NYSE:SHS)?

At Q1’s end, a total of 14 of the hedge funds we track were bullish in this stock, a change of -26% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.

When looking at the hedgies we track, Kenneth Mario Garschina’s Mason Capital Management had the biggest position in Sauer-Danfoss Inc. (NYSE:SHS), worth close to $139.2 million, accounting for 3.5% of its total 13F portfolio. Sitting at the No. 2 spot is Carl Tiedemann and Michael Tiedemann of TIG Advisors, with a $48 million position; 7.3% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include D. E. Shaw’s D E Shaw, Jane Mendillo’s Harvard Management Co and Cliff Asness’s AQR Capital Management.

Because Sauer-Danfoss Inc. (NYSE:SHS) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies that decided to sell off their entire stakes in Q1. Interestingly, Sander Gerber’s Hudson Bay Capital Management cut the biggest stake of the 450+ funds we key on, totaling about $27.9 million in call options. Chuck Royce’s fund, Royce & Associates, also dropped its stock, about $9.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds in Q1.

Insider trading activity in Sauer-Danfoss Inc. (NYSE:SHS)

Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, Sauer-Danfoss Inc. (NYSE:SHS) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Sauer-Danfoss Inc. (NYSE:SHS). These stocks are Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), ITT Corp (NYSE:ITT), 3D Systems Corporation (NYSE:DDD), and The Middleby Corporation (NASDAQ:MIDD). All of these stocks are in the diversified machinery industry and their market caps are closest to SHS’s market cap.