ABM Industries, Inc. (NYSE:ABM) was in 9 hedge funds’ portfolio at the end of the first quarter of 2013. ABM investors should be aware of a decrease in support from the world’s most elite money managers lately. There were 11 hedge funds in our database with ABM positions at the end of the previous quarter.
If you’d ask most market participants, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we hone in on the crème de la crème of this club, about 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by tracking their highest performing equity investments, we have found a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, positive insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are plenty of reasons for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if shareholders know what to do (learn more here).
With these “truths” under our belt, let’s take a gander at the key action surrounding ABM Industries, Inc. (NYSE:ABM).
How are hedge funds trading ABM Industries, Inc. (NYSE:ABM)?
In preparation for this quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in ABM Industries, Inc. (NYSE:ABM). Royce & Associates has a $23.7 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Martin Whitman of Third Avenue Management, with a $21.1 million position; 0.4% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Seeing as ABM Industries, Inc. (NYSE:ABM) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies that elected to cut their positions entirely in Q1. At the top of the heap, Jim Simons’s Renaissance Technologies cut the biggest stake of the 450+ funds we track, worth about $3.6 million in stock.. Joel Greenblatt’s fund, Gotham Asset Management, also said goodbye to its stock, about $1.4 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds in Q1.
What have insiders been doing with ABM Industries, Inc. (NYSE:ABM)?
Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last six-month time period, ABM Industries, Inc. (NYSE:ABM) has seen zero unique insiders purchasing, and 4 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 ABM Industries, Inc. (NYSE:ABM). These stocks are Quad/Graphics, Inc. (NYSE:QUAD), Atlas Resource Partners, L.P. (NYSE:ARP), Interval Leisure Group, Inc. (NASDAQ:IILG), Cardtronics, Inc. (NASDAQ:CATM), and Heartland Payment Systems, Inc. (NYSE:HPY). This group of stocks are in the business services industry and their market caps match ABM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Quad/Graphics, Inc. (NYSE:QUAD) | 11 | 0 | 1 |
| Atlas Resource Partners, L.P. (NYSE:ARP) | 11 | 1 | 3 |
| Interval Leisure Group, Inc. (NASDAQ:IILG) | 11 | 0 | 0 |
| Cardtronics, Inc. (NASDAQ:CATM) | 14 | 1 | 5 |
| Heartland Payment Systems, Inc. (NYSE:HPY) | 19 | 1 | 7 |
With the returns exhibited by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading activity, and ABM Industries, Inc. (NYSE:ABM) shareholders fit into this picture quite nicely.
