Should You Buy Encore Wire Corporation (WIRE)? Methode Electronics Inc. (MEI), Power One Inc (PWER)

Encore Wire Corporation (NASDAQ:WIRE) was in 8 hedge funds’ portfolio at the end of December. WIRE investors should pay attention to an increase in hedge fund interest recently. There were 7 hedge funds in our database with WIRE positions at the end of the previous quarter.

In today’s marketplace, there are tons of indicators market participants can use to monitor publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a solid margin (see just how much).

Just as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are many incentives for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).

Consequently, we’re going to take a gander at the latest action regarding Encore Wire Corporation (NASDAQ:WIRE).

What does the smart money think about Encore Wire Corporation (NASDAQ:WIRE)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of 14% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Third Avenue Management, managed by Martin Whitman, holds the largest position in Encore Wire Corporation (NASDAQ:WIRE). Third Avenue Management has a $23 million position in the stock, comprising 0.5% of its 13F portfolio. On Third Avenue Management’s heels is Chuck Royce of Royce & Associates, with a $11 million position; 0% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Joel Greenblatt’s Gotham Asset Management, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Consequently, some big names have jumped into Encore Wire Corporation (NASDAQ:WIRE) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, created the largest position in Encore Wire Corporation (NASDAQ:WIRE). Tudor Investment Corp had 0 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0 million position during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.

What have insiders been doing with Encore Wire Corporation (NASDAQ:WIRE)?

Insider buying is most useful when the company we’re looking at has seen transactions within the past six months. Over the last half-year time period, Encore Wire Corporation (NASDAQ:WIRE) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Encore Wire Corporation (NASDAQ:WIRE). These stocks are Methode Electronics Inc. (NYSE:MEI), Power One Inc (NASDAQ:PWER), Sanmina Corp (NASDAQ:SANM), Nam Tai Electronics, Inc. (NYSE:NTE), and Advanced Energy Industries, Inc. (NASDAQ:AEIS). This group of stocks are the members of the diversified electronics industry and their market caps are closest to WIRE’s market cap.

With the results demonstrated by our studies, everyday investors should always monitor hedge fund and insider trading sentiment, and Encore Wire Corporation (NASDAQ:WIRE) is an important part of this process.

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