Is Allegheny Technologies Incorporated (NYSE:ATI) worth your attention right now? Hedge funds are in an optimistic mood. The number of bullish hedge fund positions increased by 1 lately.
To most stock holders, hedge funds are assumed to be worthless, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation today, we at Insider Monkey choose to focus on the moguls of this group, close to 450 funds. It is estimated that this group controls the majority of the smart money's total capital, and by tracking their top picks, we have figured out a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 23.3 percentage points in 8 months (see the details here).
Just as integral, positive insider trading sentiment is another way to break down the financial markets. Obviously, there are many stimuli for an insider to cut shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Keeping this in mind, we're going to take a gander at the recent action regarding Allegheny Technologies Incorporated (NYSE:ATI).
In preparation for this quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 5% from one quarter earlier. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.
Of the funds we track, Bronson Point Partners, managed by Larry Foley and Paul Farrell, holds the most valuable position in Allegheny Technologies Incorporated (NYSE:ATI). Bronson Point Partners has a $36.1 million position in the stock, comprising 2.9% of its 13F portfolio. Coming in second is North Run Capital, managed by Thomas Ellis and Todd Hammer, which held a $35.9 million position; 4.4% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Curtis Macnguyen's Ivory Capital (Investment Mgmt), John Burbank's Passport Capital and Daniel Bubis's Tetrem Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls' herd. North Run Capital, managed by Thomas Ellis and Todd Hammer, assembled the most valuable position in Allegheny Technologies Incorporated (NYSE:ATI). North Run Capital had 35.9 million invested in the company at the end of the quarter. Curtis Macnguyen's Ivory Capital (Investment Mgmt) also initiated a $24.9 million position during the quarter. The other funds with new positions in the stock are Daniel Bubis's Tetrem Capital Management, Sanford J. Colen's Apex Capital, and Dmitry Balyasny's Balyasny Asset Management.
Insider buying is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, Allegheny Technologies Incorporated (NYSE:ATI) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to Allegheny Technologies Incorporated (NYSE:ATI). These stocks are Reliance Steel & Aluminum (NYSE:RS), Worthington Industries, Inc. (NYSE:WOR), Chart Industries, Inc. (NASDAQ:GTLS), Carpenter Technology Corporation (NYSE:CRS), and Valmont Industries, Inc. (NYSE:VMI). This group of stocks are the members of the metal fabrication industry and their market caps are closest to ATI's market cap.