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Hedge Funds Aren’t Crazy About A. M. Castle & Co (CASL) Anymore

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Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

A. M. Castle & Co (OTCMKTS:CASL) investors should be aware of a decrease in support from the world’s most successful money managers recently. CASL was in 7 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with CASL positions at the end of the previous quarter. At the end of this article we will also compare CASL to other stocks including Xplore Technologies Corp. (NASDAQ:XPLR), Arca Biopharma Inc (NASDAQ:ABIO), and Alliqua Biomedical Inc (NASDAQ:ALQA) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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With all of this in mind, let’s take a peek at the new action surrounding A. M. Castle & Co (OTCMKTS:CASL).

How are hedge funds trading A. M. Castle & Co (OTCMKTS:CASL)?

Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards CASL over the last 5 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

HedgeFundSentimentChart

According to Insider Monkey’s hedge fund database, William C. Martin’s Raging Capital Management holds the largest position in A. M. Castle & Co (OTCMKTS:CASL). Raging Capital Management has a $3.7 million position in the stock. On Raging Capital Management’s heels is Mark Cohen of Stone House Capital, with a $3.2 million position; 8.2% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism consist of John Osterweis’ Osterweis Capital Management, Chuck Royce’s Royce & Associates and Ken Griffin’s Citadel Investment Group. We should note that Raging Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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