Hedge Funds Are Cautious Of These 4 Auto Companies

Hedge Funds Are Cautious Of These 4 Auto Companies

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It's been a while since we looked at the auto sector. The automobile sector has undergone major changes since the crisis in 2008. Sales were up 11% last year and are expected to be stable going forward. The automotive market still contributes around 5% to U.S. GDP.

Included below is the change in employment in the auto sector

Screen shot 2013-01-29 at 12.56.03 PM

Maybe hedge fund managers think that the auto ride is over. We ran a screen with this in mind.

We screened for those with bearish sentiment from institutional investors, with significant net institutional sales over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform in the future.

Interactive Chart: Press Play to compare changes in the 1-year return for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks deserve this negative sentiment? Use this list as a starting point for your own analysis.

 

1. BorgWarner Inc. (BWA, Earnings, Analysts, Financials): Engages in the manufacture and sale of engineered automotive systems and components primarily for power train applications worldwide. Market cap at $8.92B, most recent closing price at $76.25. Net institutional sales in the current quarter at -5.9M shares, which represents about 5.11% of the company's float of 115.57M shares. The top 2 sellers of the stock are American Century Companies, and Wells Fargo.
 

 

2. Meritor, Inc. (MTOR, Earnings, Analysts, Financials): Provides drivetrain mobility and braking solutions for original equipment (OE) manufacturers of trucks, trailers, and specialty vehicles. Market cap at $535.69M, most recent closing price at $5.55. Net institutional sales in the current quarter at -4.8M shares, which represents about 5.52% of the company's float of 86.88M shares. The top 2 sellers of the stock are Wellington Management, and SG Americas.
 

 

3. Standard Motor Products Inc. (SMP, Earnings, Analysts, Financials): Distributes replacement parts for motor vehicles in the automotive aftermarket industry primarily in the United States, Canada, and Latin America. Market cap at $553.16M, most recent closing price at $24.24. Net institutional sales in the current quarter at -1.1M shares, which represents about 5.37% of the company's float of 20.48M shares. The top 2 sellers of the stock are Oppenheimer Funds, and Barclays Global Investors UK Holdings.
 

 

4. Westport Innovations Inc. (WPRT, Earnings, Analysts, Financials): Provides alternative fuel, low-emissions technologies that enable engines to operate on fuels, such as compressed natural gas, liquefied natural gas, hydrogen, and biofuels. Market cap at $1.53B, most recent closing price at $27.68. Net institutional sales in the current quarter at -4.0M shares, which represents about 8.98% of the company's float of 44.55M shares. The top 2 sellers of the stock are Soros Fund Management, and FMR, LLC.
 

 

List compiled by Sabina Bhatia.  Institutional data sourced from Fidelity, all other data sourced from Finviz.

 

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One Response to “Hedge Funds Are Cautious Of These 4 Auto Companies”

  1. Murphy says:

    This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform in the future wheel polish

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