In the eyes of most stock holders, hedge funds are assumed to be unimportant, old financial vehicles of years past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey look at the aristocrats of this club, around 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total capital, and by monitoring their top picks, we have determined a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as integral, optimistic insider trading activity is another way to break down the world of equities. There are a number of motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a glance at the key action surrounding Harsco Corporation (NYSE:HSC).
How are hedge funds trading Harsco Corporation (NYSE:HSC)?
At the end of the fourth quarter, a total of 17 of the hedge funds we track held long positions in this stock, a change of 31% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Harsco Corporation (NYSE:HSC). Pzena Investment Management has a $22 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $14 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Steven Cohen’s SAC Capital Advisors, Mark Kingdon’s Kingdon Capital and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, key money managers have been driving this bullishness. Kingdon Capital, managed by Mark Kingdon, assembled the most outsized position in Harsco Corporation (NYSE:HSC). Kingdon Capital had 7 million invested in the company at the end of the quarter. David Dreman’s Dreman Value Management also initiated a $3 million position during the quarter. The other funds with brand new HSC positions are Glenn Russell Dubin’s Highbridge Capital Management, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, and John Overdeck and David Siegel’s Two Sigma Advisors.
What do corporate executives and insiders think about Harsco Corporation (NYSE:HSC)?
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Harsco Corporation (NYSE:HSC) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the results demonstrated by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Harsco Corporation (NYSE:HSC) shareholders fit into this picture quite nicely.
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