Should You Avoid Autoliv Inc. (ALV)?

Autoliv Inc. (NYSE:ALV) shareholders have witnessed a decrease in support from the world’s most elite money managers recently.

To the average investor, there are many methods investors can use to analyze Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a significant margin (see just how much).

Equally as beneficial, positive insider trading activity is another way to break down the marketplace. Obviously, there are a variety of incentives for a bullish insider to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this tactic if investors understand what to do (learn more here).

Consequently, it’s important to take a look at the latest action regarding Autoliv Inc. (NYSE:ALV).

What have hedge funds been doing with Autoliv Inc. (NYSE:ALV)?

At Q1’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Autoliv Inc. (NYSE:ALV). AQR Capital Management has a $19 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Bill Miller of Legg Mason Capital Management, with a $12.5 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Michael Larson’s Bill & Melinda Gates Foundation Trust and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Autoliv Inc. (NYSE:ALV) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that decided to sell off their positions entirely at the end of the first quarter. At the top of the heap, David Keidan’s Buckingham Capital Management sold off the largest stake of the “upper crust” of funds we key on, valued at about $3.4 million in stock., and Anil Stevens and Glenn Shapiro of Parameter Capital Management was right behind this move, as the fund cut about $1.3 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds at the end of the first quarter.

How are insiders trading Autoliv Inc. (NYSE:ALV)?

Insider buying is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, Autoliv Inc. (NYSE:ALV) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Autoliv Inc. (NYSE:ALV). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), BorgWarner Inc. (NYSE:BWA), Lear Corporation (NYSE:LEA), LKQ Corporation (NASDAQ:LKQ), and TRW Automotive Holdings Corp. (NYSE:TRW). All of these stocks are in the auto parts industry and their market caps are closest to ALV’s market cap.