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Is Sigma-Aldrich Corporation (SIAL) Going to Burn These Hedge Funds?: The Valspar Corporation (VAL), Albemarle Corporation (ALB)

Is Sigma-Aldrich Corporation (NASDAQ:SIAL) worth your attention right now? Money managers are getting more bullish. The number of long hedge fund bets inched up by 1 in recent months.

Sigma-Aldrich Corporation (NASDAQ:SIAL)

In the 21st century investor’s toolkit, there are plenty of metrics investors can use to watch the equity markets. Some of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a significant margin (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. There are many incentives for an executive to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this method if shareholders know where to look (learn more here).

With these “truths” under our belt, let’s take a peek at the recent action regarding Sigma-Aldrich Corporation (NASDAQ:SIAL).

What does the smart money think about Sigma-Aldrich Corporation (NASDAQ:SIAL)?

Heading into 2013, a total of 13 of the hedge funds we track were bullish in this stock, a change of 8% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Select Equity Group, managed by Robert Joseph Caruso, holds the biggest position in Sigma-Aldrich Corporation (NASDAQ:SIAL). Select Equity Group has a $153 million position in the stock, comprising 2.4% of its 13F portfolio. Coming in second is Donald Chiboucis of Columbus Circle Investors, with a $9 million position; 0% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include David Harding’s Winton Capital Management, Ken Fisher’s Fisher Asset Management and Steven Cohen’s SAC Capital Advisors.

Now, key money managers have been driving this bullishness. SAC Capital Advisors, managed by Steven Cohen, created the most outsized call position in Sigma-Aldrich Corporation (NASDAQ:SIAL). SAC Capital Advisors had 4 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $1 million position during the quarter. The other funds with brand new SIAL positions are Jason Adler’s AlphaBet Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

What do corporate executives and insiders think about Sigma-Aldrich Corporation (NASDAQ:SIAL)?

Insider buying is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time period, Sigma-Aldrich Corporation (NASDAQ:SIAL) has seen 2 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Sigma-Aldrich Corporation (NASDAQ:SIAL). These stocks are The Valspar Corporation (NYSE:VAL), Albemarle Corporation (NYSE:ALB), W.R. Grace & Co. (NYSE:GRA), International Flavors & Fragrances Inc (NYSE:IFF), and Westlake Chemical Corporation (NYSE:WLK). This group of stocks are the members of the specialty chemicals industry and their market caps are similar to SIAL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The Valspar Corporation (NYSE:VAL) 17 1 3
Albemarle Corporation (NYSE:ALB) 17 0 2
W.R. Grace & Co. (NYSE:GRA) 37 0 5
International Flavors & Fragrances Inc (NYSE:IFF) 17 0 4
Westlake Chemical Corporation (NYSE:WLK) 21 0 12

With the results exhibited by our research, everyday investors must always watch hedge fund and insider trading activity, and Sigma-Aldrich Corporation (NASDAQ:SIAL) applies perfectly to this mantra.

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