Is Kaiser Aluminum Corp. (NASDAQ:KALU) a cheap investment today? Hedge funds are in a bearish mood. The number of bullish hedge fund positions fell by 3 recently.
At the moment, there are a multitude of gauges market participants can use to track their holdings. A duo of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can trounce the market by a solid amount (see just how much).
Just as beneficial, optimistic insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are many motivations for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if investors know what to do (learn more here).
Keeping this in mind, it’s important to take a look at the recent action regarding Kaiser Aluminum Corp. (NASDAQ:KALU).
How are hedge funds trading Kaiser Aluminum Corp. (NASDAQ:KALU)?
Heading into Q2, a total of 14 of the hedge funds we track were long in this stock, a change of -18% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Carlson Capital, managed by Clint Carlson, holds the most valuable position in Kaiser Aluminum Corp. (NASDAQ:KALU). Carlson Capital has a $29.1 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Martin Whitman of Third Avenue Management, with a $28.7 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Michael Price’s MFP Investors and John Burbank’s Passport Capital.
Due to the fact that Kaiser Aluminum Corp. (NASDAQ:KALU) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds who were dropping their entire stakes at the end of the first quarter. At the top of the heap, D. E. Shaw’s D E Shaw dropped the largest investment of the “upper crust” of funds we key on, worth about $2.8 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dropped about $0.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds at the end of the first quarter.
How have insiders been trading Kaiser Aluminum Corp. (NASDAQ:KALU)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, Kaiser Aluminum Corp. (NASDAQ:KALU) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Kaiser Aluminum Corp. (NASDAQ:KALU) is an important part of this process.