Is Quaker Chemical Corp (NYSE:KWR) a first-rate investment now? The best stock pickers are becoming more confident. The number of bullish hedge fund bets increased by 4 lately.
If you’d ask most traders, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are over 8000 funds trading at the moment, we at Insider Monkey choose to focus on the masters of this club, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing picks, we have come up with a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as key, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are many motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the recent action surrounding Quaker Chemical Corp (NYSE:KWR).
What have hedge funds been doing with Quaker Chemical Corp (NYSE:KWR)?
At Q1’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of 57% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Quaker Chemical Corp (NYSE:KWR), worth close to $82.7 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Joel Greenblatt of Gotham Asset Management, with a $1.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Richard Driehaus’s Driehaus Capital, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Now, key money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the most valuable call position in Quaker Chemical Corp (NYSE:KWR). D E Shaw had 0.7 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $0.5 million position during the quarter. The other funds with brand new KWR positions are Israel Englander’s Millennium Management and Matthew Tewksbury’s Stevens Capital Management.
Insider trading activity in Quaker Chemical Corp (NYSE:KWR)
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time frame, Quaker Chemical Corp (NYSE:KWR) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Quaker Chemical Corp (NYSE:KWR). These stocks are Koppers Holdings Inc. (NYSE:KOP), WD-40 Company (NASDAQ:WDFC), Kraton Performance Polymers Inc (NYSE:KRA), OM Group, Inc. (NYSE:OMG), and Flotek Industries Inc (NYSE:FTK). This group of stocks belong to the specialty chemicals industry and their market caps match KWR’s market cap.