This Metric Says You Are Smart to Sell Sims Metal Management Ltd (ADR) (SMS)

Page 1 of 2

Is Sims Metal Management Ltd (ADR) (NYSE:SMS) a buy right now? Investors who are in the know are getting less bullish. The number of long hedge fund bets were cut by 3 recently.

In the eyes of most investors, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds trading at present, we hone in on the leaders of this club, about 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total capital, and by monitoring their highest performing investments, we have unearthed a few 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as beneficial, optimistic insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are lots of incentives for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

With all of this in mind, we’re going to take a glance at the recent action surrounding Sims Metal Management Ltd (ADR) (NYSE:SMS).

How have hedgies been trading Sims Metal Management Ltd (ADR) (NYSE:SMS)?

In preparation for this quarter, a total of 4 of the hedge funds we track were bullish in this stock, a change of -43% from the previous quarter.

Seeing as Sims Metal Management Ltd (ADR) (NYSE:SMS) has faced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of money managers who sold off their positions entirely at the end of the first quarter. Intriguingly, Ian Simm’s Impax Asset Management sold off the largest position of all the hedgies we key on, worth about $12.2 million in stock, and Russell Lucas of Lucas Capital Management was right behind this move, as the fund said goodbye to about $0.7 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds at the end of the first quarter.

Allegheny Technologies Incorporated (NYSE:ATI)

Insider trading activity in Sims Metal Management Ltd (ADR) (NYSE:SMS)

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the latest 180-day time period, Sims Metal Management Ltd (ADR) (NYSE:SMS) has experienced 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 Sims Metal Management Ltd (ADR) (NYSE:SMS). These stocks are Allegheny Technologies Incorporated (NYSE:ATI), Mueller Industries, Inc. (NYSE:MLI), Carpenter Technology Corporation (NYSE:CRS), Chart Industries, Inc. (NASDAQ:GTLS), and Worthington Industries, Inc. (NYSE:WOR). This group of stocks are in the metal fabrication industry and their market caps resemble SMS’s market cap.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!