Edgen Group Inc (NYSE:EDG) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. EDG has experienced an increase in support from the world’s most elite money managers of late. There were 7 hedge funds in our database with EDG positions at the end of the previous quarter.
In the financial world, there are a multitude of methods shareholders can use to analyze the equity markets. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outpace the market by a superb margin (see just how much).
Equally as important, optimistic insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are lots of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the recent action encompassing Edgen Group Inc (NYSE:EDG).
Hedge fund activity in Edgen Group Inc (NYSE:EDG)
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 43% from the third quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Passport Capital, managed by John Burbank, holds the biggest position in Edgen Group Inc (NYSE:EDG). Passport Capital has a $8 million position in the stock, comprising 0.3% of its 13F portfolio. On Passport Capital’s heels is Israel Englander of Millennium Management, with a $4 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Mark Kingdon’s Kingdon Capital, Richard Driehaus’s Driehaus Capital and Brian Taylor’s Pine River Capital Management.
Now, key hedge funds have been driving this bullishness. Kingdon Capital, managed by Mark Kingdon, assembled the most valuable position in Edgen Group Inc (NYSE:EDG). Kingdon Capital had 4 million invested in the company at the end of the quarter. Ryan Schaper’s Point Lobos Capital also made a $2 million investment in the stock during the quarter. The following funds were also among the new EDG investors: Jim Simons’s Renaissance Technologies and Mike Vranos’s Ellington.
How have insiders been trading Edgen Group Inc (NYSE:EDG)?
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Edgen Group Inc (NYSE:EDG) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Edgen Group Inc (NYSE:EDG). These stocks are RTI International Metals, Inc. (NYSE:RTI), Susser Petroleum Partners LP (NYSE:SUSP), Newport Corporation (NASDAQ:NEWP), Lawson Products, Inc. (NASDAQ:LAWS), and Houston Wire & Cable Company (NASDAQ:HWCC). This group of stocks belong to the industrial equipment wholesale industry and their market caps are closest to EDG’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|RTI International Metals, Inc. (NYSE:RTI)||5||1||5|
|Susser Petroleum Partners LP (NYSE:SUSP)||4||0||0|
|Newport Corporation (NASDAQ:NEWP)||9||0||6|
|Lawson Products, Inc. (NASDAQ:LAWS)||4||5||0|
|Houston Wire & Cable Company (NASDAQ:HWCC)||3||0||0|
With the returns exhibited by Insider Monkey’s studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Edgen Group Inc (NYSE:EDG) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.