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Methanex Corporation (USA) (NASDAQ:MEOH): Are Hedge Funds Right About This Stock? – Rockwood Holdings, Inc. (NYSE:ROC), NewMarket Corporation (NYSE:NEU)

Methanex Corporation (USA) (NASDAQ:MEOH) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. MEOH has seen an increase in enthusiasm from smart money lately. There were 12 hedge funds in our database with MEOH holdings at the end of the previous quarter.

Methanex Corporation (USA) (NASDAQ:MEOH)

In the financial world, there are dozens of indicators investors can use to analyze Mr. Market. A couple of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outpace their index-focused peers by a superb amount (see just how much).

Equally as key, positive insider trading activity is another way to parse down the marketplace. Obviously, there are lots of motivations for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).

With these “truths” under our belt, let’s take a glance at the recent action surrounding Methanex Corporation (USA) (NASDAQ:MEOH).

What does the smart money think about Methanex Corporation (USA) (NASDAQ:MEOH)?

At year’s end, a total of 13 of the hedge funds we track were bullish in this stock, a change of 8% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, John Burbank’s Passport Capital had the most valuable position in Methanex Corporation (USA) (NASDAQ:MEOH), worth close to $56 million, comprising 2.2% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $10 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Israel Englander’s Catapult Capital Management, Jim Simons’s Renaissance Technologies and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Now, specific money managers were breaking ground themselves. Catapult Capital Management, managed by Israel Englander, assembled the biggest position in Methanex Corporation (USA) (NASDAQ:MEOH). Catapult Capital Management had 3 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Noam Gottesman’s GLG Partners.

Insider trading activity in Methanex Corporation (USA) (NASDAQ:MEOH)

Insider buying is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, Methanex Corporation (USA) (NASDAQ:MEOH) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Methanex Corporation (USA) (NASDAQ:MEOH). These stocks are The Valspar Corporation (NYSE:VAL), Rockwood Holdings, Inc. (NYSE:ROC), Cytec Industries Inc (NYSE:CYT), NewMarket Corporation (NYSE:NEU), and RPM International Inc. (NYSE:RPM). This group of stocks are in the specialty chemicals industry and their market caps are similar to MEOH’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The Valspar Corporation (NYSE:VAL) 17 1 3
Rockwood Holdings, Inc. (NYSE:ROC) 31 0 4
Cytec Industries Inc (NYSE:CYT) 18 0 14
NewMarket Corporation (NYSE:NEU) 13 2 1
RPM International Inc. (NYSE:RPM) 14 0 4

With the returns shown by Insider Monkey’s research, retail investors should always watch hedge fund and insider trading sentiment, and Methanex Corporation (USA) (NASDAQ:MEOH) applies perfectly to this mantra.

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