Is Braskem SA (ADR) (BAK) A Good Stock To Buy?

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Consequently, key money managers were leading the bulls’ herd. Contrarian Capital created the most valuable position in Braskem SA (ADR) (NYSE:BAK) which had $1.9 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.8 million position during the quarter. The following funds were also among the new BAK investors: Mike Vranos’ Ellington and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Braskem SA (ADR) (NYSE:BAK) but similarly valued. These stocks are Owens Corning (NYSE:OC), VimpelCom Ltd (ADR) (NYSE:VIP), Steel Dynamics, Inc. (NASDAQ:STLD), and Leggett & Platt, Inc. (NYSE:LEG). This group of stocks’ market caps match BAK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OC 35 1197532 1
VIP 22 253443 12
STLD 33 634258 2
LEG 21 123384 6

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $552 million. That figure was $46 million in BAK’s case. Owens Corning (NYSE:OC) is the most popular stock in this table. On the other hand Leggett & Platt, Inc. (NYSE:LEG) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Braskem SA (ADR) (NYSE:BAK) is even less popular than LEG. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None


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