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Huntsman Corporation (NYSE:HUN): Are Hedge Funds Right About This Stock?

Huntsman Corporation (NYSE:HUN) has seen an increase in support from the world’s most elite money managers in recent months.

Earnings Analysis: Huntsman Corp. (NYSE: HUN)If you’d ask most shareholders, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by watching their top investments, we have found a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 25 percentage points in 6.5 month (check out a sample of our picks).

Just as key, positive insider trading activity is a second way to break down the marketplace. As the old adage goes: there are plenty of motivations for an executive to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if you understand where to look (learn more here).

Now, let’s take a peek at the recent action surrounding Huntsman Corporation (NYSE:HUN).

Hedge fund activity in Huntsman Corporation (NYSE:HUN)

In preparation for this year, a total of 29 of the hedge funds we track were long in this stock, a change of 16% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Passport Capital, managed by John Burbank, holds the largest position in Huntsman Corporation (NYSE:HUN). Passport Capital has a $191 million billion position in the stock, comprising 7.4% of its 13F portfolio. Coming in second is David Tepper of Appaloosa Management LP, with a $118 million position; 12.8% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Dreman’s Dreman Value Management and .

Consequently, key money managers have jumped into Huntsman Corporation (NYSE:HUN) headfirst. Hayman Advisors, managed by Kyle Bass, created the most outsized position in Huntsman Corporation (NYSE:HUN). Hayman Advisors had 22 million invested in the company at the end of the quarter. Andreas Halvorsen’s Viking Global also made a $22 million investment in the stock during the quarter. The following funds were also among the new HUN investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Sean Cullinan’s Point State Capital, and Glenn Russell Dubin’s Highbridge Capital Management.

How are insiders trading Huntsman Corporation (NYSE:HUN)?

Insider buying is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time frame, Huntsman Corporation (NYSE:HUN) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

With the returns shown by our research, retail investors should always monitor hedge fund and insider trading activity, and Huntsman Corporation (NYSE:HUN) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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