Is NewMarket Corporation (NYSE:NEU) the right investment to pursue these days? Prominent investors are becoming less confident. The number of long hedge fund bets dropped by 2 in recent months.
To the average investor, there are a multitude of methods investors can use to analyze Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outpace the broader indices by a healthy margin (see just how much).
Equally as integral, optimistic insider trading activity is another way to break down the financial markets. Just as you’d expect, there are a number of reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).
Now, it’s important to take a peek at the recent action surrounding NewMarket Corporation (NYSE:NEU).
How are hedge funds trading NewMarket Corporation (NYSE:NEU)?
At Q1’s end, a total of 12 of the hedge funds we track held long positions in this stock, a change of -14% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, D E Shaw, managed by D. E. Shaw, holds the largest position in NewMarket Corporation (NYSE:NEU). D E Shaw has a $52.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which held a $16.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Chuck Royce’s Royce & Associates, Clint Carlson’s Carlson Capital and Joel Greenblatt’s Gotham Asset Management.
Because NewMarket Corporation (NYSE:NEU) has experienced bearish sentiment from the smart money, logic holds that there was a specific group of money managers who were dropping their entire stakes heading into Q2. Interestingly, David Costen Haley’s HBK Investments said goodbye to the biggest position of the 450+ funds we monitor, totaling about $2.3 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund cut about $0.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into Q2.
Insider trading activity in NewMarket Corporation (NYSE:NEU)
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past six months. Over the last half-year time frame, NewMarket Corporation (NYSE:NEU) has seen 2 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to NewMarket Corporation (NYSE:NEU). These stocks are Rockwood Holdings, Inc. (NYSE:ROC), PolyOne Corporation (NYSE:POL), RPM International Inc. (NYSE:RPM), Methanex Corporation (USA) (NASDAQ:MEOH), and Cytec Industries Inc (NYSE:CYT). This group of stocks belong to the specialty chemicals industry and their market caps match NEU’s market cap.