MRC Global Inc (NYSE:MRC) was in 20 hedge funds' portfolio at the end of March. MRC investors should pay attention to an increase in hedge fund sentiment recently. There were 14 hedge funds in our database with MRC holdings at the end of the previous quarter.
If you'd ask most stock holders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the bigwigs of this club, close to 450 funds. It is estimated that this group controls most of the smart money's total asset base, and by watching their best equity investments, we have found a few investment strategies that have historically outpaced Mr. Market. 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, optimistic insider trading sentiment is another way to break down the marketplace. Obviously, there are a variety of motivations for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if investors understand what to do (learn more here).
With all of this in mind, it's important to take a glance at the key action regarding MRC Global Inc (NYSE:MRC).
In preparation for this quarter, a total of 20 of the hedge funds we track were long in this stock, a change of 43% from the first quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Robert Joseph Caruso's Select Equity Group had the largest position in MRC Global Inc (NYSE:MRC), worth close to $270.4 million, comprising 3.6% of its total 13F portfolio. On Select Equity Group's heels is Alan Fournier of Pennant Capital Management, with a $241 million position; the fund has 4.7% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Phill Gross and Robert Atchinson's Adage Capital Management, Ken Griffin's Citadel Investment Group and Michael R. Weisberg's Crestwood Capital Management.
As one would reasonably expect, some big names have been driving this bullishness. Highland Capital Management, managed by James Dondero, initiated the most valuable position in MRC Global Inc (NYSE:MRC). Highland Capital Management had 14.8 million invested in the company at the end of the quarter. Charles Clough's Clough Capital Partners also made a $14.7 million investment in the stock during the quarter. The following funds were also among the new MRC investors: Anand Parekh's Alyeska Investment Group, SAC Subsidiary's CR Intrinsic Investors, and Bart Baum's Ionic Capital Management.
Insider purchases made by high-level executives is at its handiest when the company we're looking at has experienced transactions within the past half-year. Over the latest half-year time period, MRC Global Inc (NYSE:MRC) has experienced 4 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to MRC Global Inc (NYSE:MRC). These stocks are Stanley Black & Decker, Inc. (NYSE:SWK), Proto Labs Inc (NYSE:PRLB), The Timken Company (NYSE:TKR), and Kennametal Inc. (NYSE:KMT). This group of stocks are the members of the machine tools & accessories industry and their market caps are closest to MRC's market cap.