Should You Avoid Winnebago Industries, Inc. (WGO)?

Winnebago Industries, Inc. (NYSE:WGO) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. WGO investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 14 hedge funds in our database with WGO positions at the end of the previous quarter.

If you’d ask most stock holders, hedge funds are assumed to be underperforming, old financial vehicles of years past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the moguls of this club, about 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total capital, and by tracking their best picks, we have revealed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started 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 the details here).

Just as integral, positive insider trading sentiment is another way to parse down the marketplace. There are plenty of reasons for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).

Now, we’re going to take a look at the key action encompassing Winnebago Industries, Inc. (NYSE:WGO).

What have hedge funds been doing with Winnebago Industries, Inc. (NYSE:WGO)?

Heading into Q2, a total of 11 of the hedge funds we track were long in this stock, a change of -21% from the previous quarter.

Seeing as Winnebago Industries, Inc. (NYSE:WGO) has witnessed a declination in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that elected to cut their full holdings last quarter. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management cut the largest stake of the 450+ funds we monitor, comprising close to $8.7 million in stock.. Thomas E. Claugus’s fund, GMT Capital, also dumped its stock, about $4.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.

How have insiders been trading Winnebago Industries, Inc. (NYSE:WGO)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Winnebago Industries, Inc. (NYSE:WGO) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Winnebago Industries, Inc. (NYSE:WGO). These stocks are Polaris Industries Inc. (NYSE:PII), Thor Industries, Inc. (NYSE:THO), Drew Industries, Inc. (NYSE:DW), Federal Signal Corporation (NYSE:FSS), and Arctic Cat Inc (NASDAQ:ACAT). This group of stocks are in the recreational vehicles industry and their market caps are similar to WGO’s market cap.