In the 21st century investor’s toolkit, there are dozens of gauges investors can use to watch the equity markets. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the market by a very impressive margin (see just how much).
Equally as necessary, positive insider trading activity is another way to analyze the stock market universe. As the old adage goes: there are many motivations for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).
Keeping this in mind, it’s important to discuss the latest info about TransDigm Group Incorporated (NYSE:TDG).
How are hedge funds trading TransDigm Group Incorporated (NYSE:TDG)?
In preparation for the third quarter, a total of 47 of the hedge funds we track were long in this stock, a change of 21% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.
When using filings from the hedgies we track, Stephen Mandel’s Lone Pine Capital had the most valuable position in TransDigm Group Incorporated (NYSE:TDG), worth close to $400.7 million, accounting for 2% of its total 13F portfolio. Sitting at the No. 2 spot is Alan Fournier of Pennant Capital Management, with a $337.5 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Lee Ainslie’s Maverick Capital, Bain Capital’s Brookside Capital and Andrew J. M. Spokes’s Farallon Capital.
As one would understandably expect, particular hedge funds have jumped into TransDigm Group Incorporated (NYSE:TDG) headfirst. Lone Pine Capital, managed by Stephen Mandel, assembled the most outsized position in TransDigm Group Incorporated (NYSE:TDG). Lone Pine Capital had 400.7 million invested in the company at the end of the quarter. Alan Fournier’s Pennant Capital Management also made a $337.5 million investment in the stock during the quarter. The following funds were also among the new TDG investors: Lee Ainslie’s Maverick Capital, Bain Capital’s Brookside Capital, and Andrew J. M. Spokes’s Farallon Capital.
How have insiders been trading TransDigm Group Incorporated (NYSE:TDG)?
Insider buying made by high-level executives is best served when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time frame, TransDigm Group Incorporated (NYSE:TDG) has experienced 2 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to TransDigm Group Incorporated (NYSE:TDG). These stocks are Triumph Group Inc (NYSE:TGI), B/E Aerospace Inc (NASDAQ:BEAV), Embraer SA (ADR) (NYSE:ERJ), Rockwell Collins, Inc. (NYSE:COL), and L-3 Communications Holdings, Inc. (NYSE:LLL). This group of stocks are the members of the aerospace/defense products & services industry and their market caps are similar to TDG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Triumph Group Inc (NYSE:TGI) | 25 | 0 | 1 |
| B/E Aerospace Inc (NASDAQ:BEAV) | 38 | 0 | 5 |
| Embraer SA (ADR) (NYSE:ERJ) | 8 | 0 | 0 |
| Rockwell Collins, Inc. (NYSE:COL) | 18 | 0 | 13 |
| L-3 Communications Holdings, Inc. (NYSE:LLL) | 13 | 0 | 12 |
Using the returns demonstrated by our tactics, regular investors must always keep one eye on hedge fund and insider trading activity, and TransDigm Group Incorporated (NYSE:TDG) applies perfectly to this mantra.
