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Hedge Funds Are Selling Celanese Corporation (CE)

Celanese Corporation (NYSE:CE) has experienced a decrease in enthusiasm from smart money in recent months.

To most traders, hedge funds are seen as worthless, outdated financial tools of the past. While there are greater than 8000 funds with their doors open at present, we hone in on the aristocrats of this club, about 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total asset base, and by watching their best picks, we have revealed a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as key, positive insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are a number of stimuli for an insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action regarding Celanese Corporation (NYSE:CE).

What have hedge funds been doing with Celanese Corporation (NYSE:CE)?

At Q1’s end, a total of 21 of the hedge funds we track were bullish in this stock, a change of -19% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, GMT Capital, managed by Thomas E. Claugus, holds the most valuable position in Celanese Corporation (NYSE:CE). GMT Capital has a $273.8 million position in the stock, comprising 6.2% of its APPALOOSA MANAGEMENT LP13F portfolio. Sitting at the No. 2 spot is Appaloosa Management LP, managed by David Tepper, which held a $46.4 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Curtis Macnguyen’s Ivory Capital (Investment Mgmt), Michael Messner’s Seminole Capital (Investment Mgmt) and D. E. Shaw’s D E Shaw.

Judging by the fact that Celanese Corporation (NYSE:CE) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of fund managers that decided to sell off their full holdings last quarter. Interestingly, Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital sold off the biggest investment of all the hedgies we monitor, worth close to $34.8 million in stock., and Clint Carlson of Carlson Capital was right behind this move, as the fund cut about $14.8 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 5 funds last quarter.

What have insiders been doing with Celanese Corporation (NYSE:CE)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, Celanese Corporation (NYSE:CE) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

With the results exhibited by our studies, everyday investors must always monitor hedge fund and insider trading activity, and Celanese Corporation (NYSE:CE) is no exception.

Click here to learn why you should track hedge funds

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