Should You Buy TRW Automotive Holdings Corp. (TRW)?

Is TRW Automotive Holdings Corp. (NYSE:TRW) a buy?

In the financial world, there are tons of metrics shareholders can use to track stocks. A duo of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outperform their index-focused peers by a healthy amount (see just how much).

Just as useful, optimistic insider trading sentiment is another way to look at the investments you’re interested in. Just as you’d expect, there are a variety of motivations for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).

Thus, let’s study the newest info for TRW Automotive Holdings Corp. (NYSE:TRW).

What does the smart money think about TRW Automotive Holdings Corp. (NYSE:TRW)?

Heading into Q3, a total of 36 of the hedge funds we track were bullish in this stock, a change of 9% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

Out of the hedge funds we follow, Harris Associates, managed by Natixis Global Asset Management, holds the most valuable position in TRW Automotive Holdings Corp. (NYSE:TRW). Harris Associates has a $419.9 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is GMT Capital, managed by Thomas E. Claugus, which held a $158.6 million position; 3.6% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, Cliff Asness’s AQR Capital Management and Alexander Mitchell’s Scopus Asset Management.

As industrywide interest increased, certain money managers have been driving this bullishness. GMT Capital, managed by Thomas E. Claugus, created the most valuable position in TRW Automotive Holdings Corp. (NYSE:TRW). GMT Capital had 158.6 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $91.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, Cliff Asness’s AQR Capital Management, and Alexander Mitchell’s Scopus Asset Management.

What do corporate executives and insiders think about TRW Automotive Holdings Corp. (NYSE:TRW)?

Insider buying made by high-level executives is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last six-month time frame, TRW Automotive Holdings Corp. (NYSE:TRW) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to TRW Automotive Holdings Corp. (NYSE:TRW). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), BorgWarner Inc. (NYSE:BWA), Lear Corporation (NYSE:LEA), LKQ Corporation (NASDAQ:LKQ), and Autoliv Inc. (NYSE:ALV). This group of stocks are the members of the auto parts industry and their market caps match TRW’s market cap.