Is Albemarle Corporation (NYSE:ALB) a bargain? The smart money is getting less optimistic. The number of long hedge fund bets shrunk by 6 recently.
At the moment, there are many gauges market participants can use to watch Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can trounce the broader indices by a solid amount (see just how much).
Just as important, bullish insider trading activity is a second way to break down the stock market universe. Obviously, there are a number 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. Plenty of academic studies have demonstrated the valuable potential of this tactic if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a glance at the key action encompassing Albemarle Corporation (NYSE:ALB).
How have hedgies been trading Albemarle Corporation (NYSE:ALB)?
Heading into 2013, a total of 17 of the hedge funds we track were bullish in this stock, a change of -26% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, GMT Capital, managed by Thomas E. Claugus, holds the most valuable position in Albemarle Corporation (NYSE:ALB). GMT Capital has a $76 million position in the stock, comprising 1.9% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $35 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Steven Cohen’s SAC Capital Advisors, Chuck Royce’s Royce & Associates and Robert Joseph Caruso’s Select Equity Group.
Judging by the fact that Albemarle Corporation (NYSE:ALB) has experienced declining sentiment from the smart money, it’s safe to say that there is a sect of fund managers who sold off their entire stakes last quarter. Interestingly, Andreas Halvorsen’s Viking Global cut the largest position of the “upper crust” of funds we key on, valued at an estimated $91 million in stock.. Jim Simons’s fund, Renaissance Technologies, also said goodbye to its stock, about $18 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds last quarter.
How are insiders trading Albemarle Corporation (NYSE:ALB)?
Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, Albemarle Corporation (NYSE:ALB) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey’s tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Albemarle Corporation (NYSE:ALB) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.