Is Mechel OAO (ADR) (NYSE:MTL) a good investment?
In today’s marketplace, there are many gauges investors can use to watch publicly traded companies. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the broader indices by a healthy amount (see just how much).
Equally as useful, optimistic insider trading sentiment is a second way to analyze the world of equities. There are a number of stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).
Thus, we're going to analyze the latest info for Mechel OAO (ADR) (NYSE:MTL).
At the end of the second quarter, a total of 4 of the hedge funds we track held long positions in this stock, a change of -50% from one quarter earlier. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably.
Out of the hedge funds we follow, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Mechel OAO (ADR) (NYSE:MTL). Renaissance Technologies has a $7.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is PEAK6 Capital Management, managed by Matthew Hulsizer, which held a $0.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Ken Griffin's Citadel Investment Group, and Cliff Asness's AQR Capital Management.
Since Mechel OAO (ADR) (NYSE:MTL) has witnessed a fall in interest from upper-tier hedge fund managers, it's safe to say that there is a sect of funds that elected to cut their entire stakes at the end of the second quarter. At the top of the heap, Jane Mendillo's Harvard Management Co dropped the largest position of all the hedgies we monitor, worth close to $0.6 million in stock. Mike Vranos's fund, Ellington, also dropped its stock, about $0.4 million worth. These moves are important to note, as total hedge fund interest dropped by 4 funds at the end of the second quarter.
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, Mechel OAO (ADR) (NYSE:MTL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Mechel OAO (ADR) (NYSE:MTL). These stocks are Ternium S.A. (ADR) (NYSE:TX), Harsco Corporation (NYSE:HSC), Steel Dynamics, Inc. (NASDAQ:STLD), Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM), and United States Steel Corporation (NYSE:X). This group of stocks are the members of the steel & iron industry and their market caps match MTL's market cap.