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In the eyes of most investors, hedge funds are seen as slow, outdated investment tools of yesteryear.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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!