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GrafTech International Ltd (NYSE:GTI): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

GrafTech International Ltd (NYSE:GTI) was in 21 hedge funds’ portfolio at the end of December. GTI investors should be aware of an increase in hedge fund sentiment lately. There were 20 hedge funds in our database with GTI positions at the end of the previous quarter.

GrafTech International Ltd

If you’d ask most traders, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, we at Insider Monkey hone in on the upper echelon of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by monitoring their best equity investments, we have unsheathed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as beneficial, bullish insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are a variety of motivations for an insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).

Consequently, we’re going to take a look at the latest action regarding GrafTech International Ltd (NYSE:GTI).

What does the smart money think about GrafTech International Ltd (NYSE:GTI)?

At the end of the fourth quarter, a total of 21 of the hedge funds we track were long in this stock, a change of 5% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in GrafTech International Ltd (NYSE:GTI). Royce & Associates has a $176 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Samlyn Capital, managed by Robert Pohly, which held a $55 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Mario Gabelli’s GAMCO Investors, Robert Pitts’s Steadfast Capital Management and Jim Simons’s Renaissance Technologies.

As aggregate interest increased, key money managers were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, created the most valuable position in GrafTech International Ltd (NYSE:GTI). Highbridge Capital Management had 1 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital and Jacob Gottlieb’s Visium Asset Management.

What do corporate executives and insiders think about GrafTech International Ltd (NYSE:GTI)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, GrafTech International Ltd (NYSE:GTI) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned tactics, retail investors must always monitor hedge fund and insider trading sentiment, and GrafTech International Ltd (NYSE:GTI) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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