Is Westinghouse Air Brake Technologies Corp (NYSE:WAB) a buy, sell, or hold? The smart money is taking a bearish view. The number of bullish hedge fund bets decreased by 4 recently.
In today’s marketplace, there are plenty of metrics investors can use to analyze Mr. Market. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace the broader indices by a healthy amount (see just how much).
Just as beneficial, optimistic insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a variety of incentives for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
Consequently, let’s take a gander at the key action encompassing Westinghouse Air Brake Technologies Corp (NYSE:WAB).
What have hedge funds been doing with Westinghouse Air Brake Technologies Corp (NYSE:WAB)?
Heading into 2013, a total of 16 of the hedge funds we track were bullish in this stock, a change of -20% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, Robert Joseph Caruso’s Select Equity Group had the biggest position in Westinghouse Air Brake Technologies Corp (NYSE:WAB), worth close to $162.1 million, comprising 2.5% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $140.7 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Mariko Gordon’s Daruma Asset Management, Andrew Sandler’s Sandler Capital Management and Israel Englander’s Millennium Management.
Seeing as Westinghouse Air Brake Technologies Corp (NYSE:WAB) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there were a few hedgies that slashed their positions entirely at the end of the year. Interestingly, Jim Simons’s Renaissance Technologies dumped the biggest investment of the “upper crust” of funds we monitor, totaling close to $6.9 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dumped about $3.4 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 4 funds at the end of the year.
How are insiders trading Westinghouse Air Brake Technologies Corp (NYSE:WAB)?
Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past half-year. Over the latest six-month time frame, Westinghouse Air Brake Technologies Corp (NYSE:WAB) has experienced zero unique insiders purchasing, and 19 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Westinghouse Air Brake Technologies Corp (NYSE:WAB). These stocks are Canadian Pacific Railway Limited (USA) (NYSE:CP), Kansas City Southern (NYSE:KSU), Guangshen Railway Co. Ltd (ADR) (NYSE:GSH), Trinity Industries, Inc. (NYSE:TRN), and Genesee & Wyoming Inc (NYSE:GWR). This group of stocks are the members of the railroads industry and their market caps match WAB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Canadian Pacific Railway Limited (USA) (NYSE:CP) | 30 | 0 | 0 |
| Kansas City Southern (NYSE:KSU) | 9 | 0 | 6 |
| Guangshen Railway Co. Ltd (ADR) (NYSE:GSH) | 1 | 0 | 0 |
| Trinity Industries, Inc. (NYSE:TRN) | 14 | 0 | 7 |
| Genesee & Wyoming Inc (NYSE:GWR) | 19 | 1 | 5 |
With the results shown by our research, retail investors should always watch hedge fund and insider trading sentiment, and Westinghouse Air Brake Technologies Corp (NYSE:WAB) applies perfectly to this mantra.
