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Hedge Funds Are Buying Quanex Building Products Corporation (NX): Apogee Enterprises, Inc. (APOG), Headwaters Inc (HW)

Quanex Building Products Corporation (NYSE:NX) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. NX investors should pay attention to an increase in support from the world’s most elite money managers recently. There were 10 hedge funds in our database with NX holdings at the end of the previous quarter.

Quanex Building Products Corporation (NYSE:NX)

To most market participants, hedge funds are seen as slow, old financial tools of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the masters of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by watching their highest performing investments, we have brought to light a number of investment strategies that have historically outpaced the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

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Keeping this in mind, let’s take a glance at the latest action regarding Quanex Building Products Corporation (NYSE:NX).

How have hedgies been trading Quanex Building Products Corporation (NYSE:NX)?

At the end of the fourth quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Quanex Building Products Corporation (NYSE:NX). Royce & Associates has a $51 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Gates Capital Management, managed by Jeffrey Gates, which held a $22 million position; 0% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Quanex Building Products Corporation (NYSE:NX). Arrowstreet Capital had 0 million invested in the company at the end of the quarter.

How are insiders trading Quanex Building Products Corporation (NYSE:NX)?

Bullish insider trading is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time period, Quanex Building Products Corporation (NYSE:NX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Quanex Building Products Corporation (NYSE:NX). These stocks are Apogee Enterprises, Inc. (NASDAQ:APOG), Headwaters Inc (NYSE:HW), Universal Forest Products, Inc. (NASDAQ:UFPI), Griffon Corporation (NYSE:GFF), and AAON, Inc. (NASDAQ:AAON). All of these stocks are in the general building materials industry and their market caps resemble NX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Apogee Enterprises, Inc. (NASDAQ:APOG) 12 0 3
Headwaters Inc (NYSE:HW) 22 0 3
Universal Forest Products, Inc. (NASDAQ:UFPI) 8 0 4
Griffon Corporation (NYSE:GFF) 9 0 0
AAON, Inc. (NASDAQ:AAON) 10 0 3

With the returns shown by our research, retail investors must always pay attention to hedge fund and insider trading activity, and Quanex Building Products Corporation (NYSE:NX) is an important part of this process.

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