This Metric Says You Are Smart to Sell Brunswick Corporation (BC)

What’s a smart Brunswick Corporation (NYSE:BC) investor to do?

Now, according to many market players, hedge funds are assumed to be useless, old investment vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds in operation currently, this site focuses on the masters of this group, about 525 funds. It is widely held that this group has its hands on the majority of all hedge funds’ total assets, and by monitoring their highest quality stock picks, we’ve determined a number of investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, bullish insider trading sentiment is another way to look at the investments you’re interested in. As the old adage goes: there are a variety of motivations for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).

What’s more, let’s examine the recent info about Brunswick Corporation (NYSE:BC).

How are hedge funds trading Brunswick Corporation (NYSE:BC)?

At Q2’s end, a total of 25 of the hedge funds we track held long positions in this stock, a change of -7% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly.

Out of the hedge funds we follow, Mariko Gordon’s Daruma Asset Management had the largest position in Brunswick Corporation (NYSE:BC), worth close to $69.4 million, accounting for 3.4% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $35.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Robert Bishop’s Impala Asset Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.

Due to the fact Brunswick Corporation (NYSE:BC) has witnessed a fall in interest from upper-tier hedge fund managers, we can see that there was a specific group of fund managers that slashed their positions entirely in Q1. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management cut the largest investment of the 450+ funds we key on, totaling an estimated $5.9 million in stock. Mark Broach’s fund, Manatuck Hill Partners, also dropped its stock, about $1.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 2 funds in Q1.

What do corporate executives and insiders think about Brunswick Corporation (NYSE:BC)?

Insider buying made by high-level executives is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Brunswick Corporation (NYSE:BC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Brunswick Corporation (NYSE:BC). These stocks are Steinway Musical Instruments Inc (NYSE:LVB), Movado Group, Inc (NYSE:MOV), SHFL entertainment Inc (NASDAQ:SHFL), Fossil Inc (NASDAQ:FOSL), and Manchester United PLC (NYSE:MANU). This group of stocks are the members of the recreational goods, other industry and their market caps match BC’s market cap.

Using the returns shown by our studies, regular investors should always pay attention to hedge fund and insider trading sentiment, and Brunswick Corporation (NYSE:BC) applies perfectly to this mantra.

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