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Should You Avoid Quaker Chemical Corp (KWR)?

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To many of your fellow readers, hedge funds are perceived as overrated, outdated investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey aim at the masters of this club, close to 525 funds. It is assumed that this group controls the majority of all hedge funds’ total assets, and by watching their highest quality equity investments, we’ve unearthed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

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Now that that’s out of the way, we’re going to discuss the recent info for Quaker Chemical Corp (NYSE:KWR).

What have hedge funds been doing with Quaker Chemical Corp (NYSE:KWR)?

Heading into Q3, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes significantly.

Quaker Chemical Corp (NYSE:KWR)According to our 13F database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Quaker Chemical Corp (NYSE:KWR). Royce & Associates has a $81.6 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Joel Greenblatt of Gotham Asset Management, with a $2.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Richard Driehaus’s Driehaus Capital and D. E. Shaw’s D E Shaw.

Due to the fact Quaker Chemical Corp (NYSE:KWR) has faced declining interest from the smart money’s best and brightest, logic holds that there was a specific group of money managers that elected to cut their positions entirely last quarter. Intriguingly, Israel Englander’s Millennium Management dropped the largest position of the 450+ funds we watch, valued at an estimated $0.3 million in stock, and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund said goodbye to about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.

What have insiders been doing with Quaker Chemical Corp (NYSE:KWR)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Quaker Chemical Corp (NYSE:KWR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators 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 are in the specialty chemicals industry and their market caps are similar to KWR’s market cap.

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