Should You Avoid United Rentals, Inc. (URI)?

United Rentals, Inc. (NYSE:URI) has experienced a decrease in activity from the world’s largest hedge funds recently.

In the 21st century investor’s toolkit, there are a multitude of methods investors can use to track stocks. A couple of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the market by a superb amount (see just how much).

Equally as integral, positive insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are many reasons for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).

Consequently, it’s important to take a glance at the latest action encompassing United Rentals, Inc. (NYSE:URI).

How have hedgies been trading United Rentals, Inc. (NYSE:URI)?

At the end of the first quarter, a total of 50 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Sean Cullinan’s Point State Capital had the biggest position in United Rentals, Inc. (NYSE:URI), worth close to $103.1 million, accounting for 1.5% of its total 13F portfolio. On Point State Capital’s heels is Highbridge Capital Management, managed by Glenn Russell Dubin, which held a $85.3 million position; 1% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Paul Reeder and Edward Shapiro’s PAR Capital Management, Ken Griffin’s Citadel Investment Group and Steven Cohen’s SAC Capital Advisors.

Because United Rentals, Inc. (NYSE:URI) has faced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Roberto Mignone’s Bridger Management dumped the biggest stake of the “upper crust” of funds we watch, valued at an estimated $46.2 million in stock.. Chuck Royce’s fund, Royce & Associates, also dropped its stock, about $12.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q2.

How are insiders trading United Rentals, Inc. (NYSE:URI)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, United Rentals, Inc. (NYSE:URI) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to United Rentals, Inc. (NYSE:URI). These stocks are Air Lease Corp (NYSE:AL), Hertz Global Holdings, Inc. (NYSE:HTZ), Avis Budget Group Inc. (NASDAQ:CAR), Ryder System, Inc. (NYSE:R), and AMERCO (NASDAQ:UHAL). This group of stocks belong to the rental & leasing services industry and their market caps are closest to URI’s market cap.

With the results shown by our time-tested strategies, retail investors must always watch hedge fund and insider trading activity, and United Rentals, Inc. (NYSE:URI) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds