Reliance Steel & Aluminum (NYSE:RS) was in 21 hedge funds’ portfolio at the end of the first quarter of 2013. RS investors should pay attention to an increase in activity from the world’s largest hedge funds lately. There were 19 hedge funds in our database with RS positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are tons of methods market participants can use to watch Mr. Market. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can trounce the S&P 500 by a healthy amount (see just how much).
Equally as beneficial, bullish insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are a number of incentives for an executive to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
With all of this in mind, we’re going to take a gander at the key action surrounding Reliance Steel & Aluminum (NYSE:RS).
How have hedgies been trading Reliance Steel & Aluminum (NYSE:RS)?
At Q1’s end, a total of 21 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in Reliance Steel & Aluminum (NYSE:RS), worth close to $423.8 million, comprising 1.3% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $82.8 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Steven Cohen’s SAC Capital Advisors.
Now, some big names have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, created the most outsized position in Reliance Steel & Aluminum (NYSE:RS). First Pacific Advisors LLC had 39.5 million invested in the company at the end of the quarter. Jorge Paulo Lemann’s 3G Capital also made a $7.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Catapult Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Mike Vranos’s Ellington.
How have insiders been trading Reliance Steel & Aluminum (NYSE:RS)?
Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time frame, Reliance Steel & Aluminum (NYSE:RS) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Reliance Steel & Aluminum (NYSE:RS). These stocks are Worthington Industries, Inc. (NYSE:WOR), Chart Industries, Inc. (NASDAQ:GTLS), Carpenter Technology Corporation (NYSE:CRS), Allegheny Technologies Incorporated (NYSE:ATI), and Valmont Industries, Inc. (NYSE:VMI). All of these stocks are in the metal fabrication industry and their market caps match RS’s market cap.