Is Ternium S.A. (ADR) (NYSE:TX) the right investment to pursue these days? The smart money is reducing their bets on the stock. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
To most shareholders, hedge funds are viewed as worthless, old investment tools of the past. While there are greater than 8000 funds in operation at the moment, we hone in on the bigwigs of this group, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by tracking their best picks, we have spotted a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as integral, positive insider trading sentiment is another way to parse down the stock market universe. Just as you’d expect, there are lots of stimuli for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this method if investors know what to do (learn more here).
Now, we’re going to take a look at the key action surrounding Ternium S.A. (ADR) (NYSE:TX).
How are hedge funds trading Ternium S.A. (ADR) (NYSE:TX)?
At year’s end, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
Of the funds we track, D. E. Shaw’s D E Shaw had the biggest position in Ternium S.A. (ADR) (NYSE:TX), worth close to $11 million, accounting for 0% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $5 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include John Overdeck and David Siegel’s Two Sigma Advisors, Christian Leone’s Luxor Capital Group and Mike Vranos’s Ellington.
Seeing as Ternium S.A. (ADR) (NYSE:TX) has faced a declination in interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds that slashed their full holdings at the end of the year. Interestingly, Michael Hintze’s CQS Cayman LP said goodbye to the largest stake of the “upper crust” of funds we key on, worth about $2 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund dumped about $0 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Ternium S.A. (ADR) (NYSE:TX)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past half-year. Over the last half-year time period, Ternium S.A. (ADR) (NYSE:TX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Ternium S.A. (ADR) (NYSE:TX). These stocks are Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM), Companhia Siderurgica Nacional (ADR) (NYSE:SID), Mechel OAO (ADR) (NYSE:MTL), United States Steel Corporation (NYSE:X), and Steel Dynamics, Inc. (NASDAQ:STLD). This group of stocks belong to the steel & iron industry and their market caps resemble TX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM)||1||0||0|
|Companhia Siderurgica Nacional (ADR) (NYSE:SID)||11||0||0|
|Mechel OAO (ADR) (NYSE:MTL)||10||0||0|
|United States Steel Corporation (NYSE:X)||18||0||0|
|Steel Dynamics, Inc. (NASDAQ:STLD)||16||0||2|
With the results shown by Insider Monkey’s studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Ternium S.A. (ADR) (NYSE:TX) applies perfectly to this mantra.
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