Should LSB Industries, Inc. (NYSE:LXU) investors track the following data?
Now, according to many traders, hedge funds are seen as bloated, old investment tools of an era lost to time. Although there are over 8,000 hedge funds with their doors open today, this site looks at the elite of this group, about 525 funds. Analysts calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by keeping an eye on their highest performing stock picks, we’ve found a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as necessary, optimistic insider trading sentiment is another way to look at the stock market universe. There are lots of stimuli for an insider to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
What’s more, it’s important to study the recent info for LSB Industries, Inc. (NYSE:LXU).
How are hedge funds trading LSB Industries, Inc. (NYSE:LXU)?
At Q2’s end, a total of 13 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.
When using filings from the hedgies we track, Martin Whitman’s Third Avenue Management had the biggest position in LSB Industries, Inc. (NYSE:LXU), worth close to $34.1 million, accounting for 0.7% of its total 13F portfolio. On Third Avenue Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $16.7 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Jeffrey Gendell’s Tontine Asset Management, Peter S. Park’s Park West Asset Management and Jim Simons’s Renaissance Technologies.
Because LSB Industries, Inc. (NYSE:LXU) has experienced dropping sentiment from the smart money’s best and brightest, we can see that there is a sect of funds that decided to sell off their entire stakes in Q1. Interestingly, Joel Greenblatt’s Gotham Asset Management said goodbye to the biggest investment of all the hedgies we monitor, worth about $0.6 million in stock. Mike Vranos’s fund, Ellington, also dropped its stock, about $0.4 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about LSB Industries, Inc. (NYSE:LXU)?
Bullish insider trading is most useful when the company in focus has experienced transactions within the past half-year. Over the latest half-year time frame, LSB Industries, Inc. (NYSE:LXU) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to LSB Industries, Inc. (NYSE:LXU). These stocks are Balchem Corporation (NASDAQ:BCPC), Solazyme Inc (NASDAQ:SZYM), FutureFuel Corp. (NYSE:FF), Rentech, Inc. (NYSEAMEX:RTK), and A. Schulman Inc (NASDAQ:SHLM). This group of stocks are the members of the chemicals – major diversified industry and their market caps are closest to LXU’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Balchem Corporation (NASDAQ:BCPC) | 10 | 0 | 0 |
| Solazyme Inc (NASDAQ:SZYM) | 9 | 0 | 0 |
| FutureFuel Corp. (NYSE:FF) | 11 | 0 | 0 |
| Rentech, Inc. (NYSEAMEX:RTK) | 16 | 0 | 0 |
| A. Schulman Inc (NASDAQ:SHLM) | 11 | 0 | 0 |
Using the results demonstrated by Insider Monkey’s studies, average investors should always watch hedge fund and insider trading sentiment, and LSB Industries, Inc. (NYSE:LXU) is no exception.
