Between June 25 and October 30 the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Materion Corp (NYSE:MTRN) and see how the stock is affected by the recent hedge fund activity.
Materion Corp (NYSE:MTRN) was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. Materion Corp has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 13 hedge funds in our database with Materion Corp holdings at the end of the previous quarter. At the end of this article we will also compare Materion Corp to other stocks including Quad/Graphics, Inc. (NYSE:QUAD), Great Southern Bancorp, Inc. (NASDAQ:GSBC), and Movado Group, Inc (NYSE:MOV) to get a better sense of its popularity.
According to most shareholders, hedge funds are seen as worthless, old financial vehicles of the past. While there are over 8,000 funds in operation today, our researchers choose to focus on the leaders of this club, approximately 700 funds. It is estimated that this group of investors command bulk of the hedge fund industry’s total capital, and by tracking their finest equity investments, Insider Monkey has found a number of investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, let’s take a gander at the recent action regarding Materion Corp (NYSE:MTRN).
What have hedge funds been doing with Materion Corp (NYSE:MTRN)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a 31% fall from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the number one position in Materion Corp (NYSE:MTRN). GAMCO Investors has a $24.8 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which holds a $2.2 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism consist of Chuck Royce’s Royce & Associates, D E Shaw, and Peter Muller’s PDT Partners.