Koppers Holdings Inc. (NYSE:KOP) has seen an increase in enthusiasm from smart money of late.
To most stock holders, hedge funds are seen as slow, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the masters of this club, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by keeping an eye on their highest performing investments, we have deciphered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, optimistic insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are a number of reasons for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action encompassing Koppers Holdings Inc. (NYSE:KOP).
How are hedge funds trading Koppers Holdings Inc. (NYSE:KOP)?
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 67% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.
Of the funds we track, David Dreman’s Dreman Value Management had the largest position in Koppers Holdings Inc. (NYSE:KOP), worth close to $7.7 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $2.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
As one would reasonably expect, some big names were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, established the largest position in Koppers Holdings Inc. (NYSE:KOP). Gotham Asset Management had 1.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new KOP positions are Neil Chriss’s Hutchin Hill Capital and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
How have insiders been trading Koppers Holdings Inc. (NYSE:KOP)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Koppers Holdings Inc. (NYSE:KOP) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Koppers Holdings Inc. (NYSE:KOP). These stocks are OM Group, Inc. (NYSE:OMG), Quaker Chemical Corp (NYSE:KWR), Flotek Industries Inc (NYSE:FTK), Innospec Inc. (NASDAQ:IOSP), and WD-40 Company (NASDAQ:WDFC). This group of stocks are the members of the specialty chemicals industry and their market caps resemble KOP’s market cap.