Should You Buy Ternium S.A. (ADR) (TX)?

As industrywide interest jumped, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in Ternium S.A. (ADR) (NYSE:TX). Arrowstreet Capital had $0.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.4 million position during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ternium S.A. (ADR) (NYSE:TX) but similarly valued. These stocks are Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Cable One Inc (NYSE:CABO), Fortress Investment Group LLC (NYSE:FIG), and AMC Entertainment Holdings Inc (NYSE:AMC). This group of stocks’ market caps match TX’s market cap.

As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $28 million in TX’s case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table. On the other hand AMC Entertainment Holdings Inc (NYSE:AMC) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Ternium S.A. (ADR) (NYSE:TX) is even less popular than AMC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.