Is PolyOne Corporation (NYSE:POL) undervalued? Investors who are in the know are in a bearish mood. The number of bullish hedge fund positions fell by 1 in recent months.
In today’s marketplace, there are plenty of gauges investors can use to track stocks. 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 best picks of the best fund managers can trounce the S&P 500 by a superb amount (see just how much).
Just as key, optimistic insider trading activity is another way to break down the world of equities. There are a variety of motivations for an executive to downsize shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).
Keeping this in mind, it's important to take a gander at the latest action surrounding PolyOne Corporation (NYSE:POL).
Heading into 2013, a total of 11 of the hedge funds we track were long in this stock, a change of -8% from the previous quarter. With hedgies' capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Fine Capital Partners, managed by Debra Fine, holds the biggest position in PolyOne Corporation (NYSE:POL). Fine Capital Partners has a $57 million position in the stock, comprising 5.7% of its 13F portfolio. Sitting at the No. 2 spot is Crispin Odey of Odey Asset Management Group, with a $32 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Chuck Royce's Royce & Associates, Richard Driehaus's Driehaus Capital and Jeffrey Vinik's Vinik Asset Management.
Since PolyOne Corporation (NYSE:POL) has witnessed falling interest from the smart money, it's safe to say that there were a few funds who were dropping their entire stakes at the end of the year. At the top of the heap, Mike Vranos's Ellington dropped the largest investment of the "upper crust" of funds we monitor, valued at close to $1 million in stock.. D. E. Shaw's fund, D E Shaw, also sold off its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds at the end of the year.
Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the latest 180-day time frame, PolyOne Corporation (NYSE:POL) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to PolyOne Corporation (NYSE:POL). These stocks are Sensient Technologies Corporation (NYSE:SXT), HB Fuller Co (NYSE:FUL), Olin Corporation (NYSE:OLN), Chemtura Corp (NYSE:CHMT), and Cabot Corp (NYSE:CBT). This group of stocks are the members of the specialty chemicals industry and their market caps are similar to POL's market cap.