Chart Industries, Inc. (NASDAQ:GTLS) investors should be aware of a decrease in hedge fund interest of late.
To most investors, hedge funds are assumed to be slow, outdated investment tools of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the upper echelon of this club, close to 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their best equity investments, we have brought to light a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as important, positive insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are lots of stimuli for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).
Keeping this in mind, it’s important to take a peek at the recent action encompassing Chart Industries, Inc. (NASDAQ:GTLS).
Hedge fund activity in Chart Industries, Inc. (NASDAQ:GTLS)
At year’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of -40% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Drew Cupps’s Cupps Capital Management had the biggest position in Chart Industries, Inc. (NASDAQ:GTLS), worth close to $12.7 million, accounting for 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, managed by Richard Driehaus, which held a $9.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Charles Clough’s Clough Capital Partners, Chuck Royce’s Royce & Associates and Brian Taylor’s Pine River Capital Management.
Seeing as Chart Industries, Inc. (NASDAQ:GTLS) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there were a few fund managers that decided to sell off their entire stakes in Q4. Interestingly, Donald Chiboucis’s Columbus Circle Investors sold off the largest investment of the 450+ funds we monitor, comprising close to $30.9 million in stock.. Andrew Sandler’s fund, Sandler Capital Management, also said goodbye to its stock, about $7.5 million worth. These moves are important to note, as total hedge fund interest fell by 6 funds in Q4.
How are insiders trading Chart Industries, Inc. (NASDAQ:GTLS)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the last six-month time period, Chart Industries, Inc. (NASDAQ:GTLS) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Chart Industries, Inc. (NASDAQ:GTLS). These stocks are Mueller Industries, Inc. (NYSE:MLI), Allegheny Technologies Incorporated (NYSE:ATI), Sims Metal Management Ltd (ADR) (NYSE:SMS), Worthington Industries, Inc. (NYSE:WOR), and Carpenter Technology Corporation (NYSE:CRS). All of these stocks are in the metal fabrication industry and their market caps are similar to GTLS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Mueller Industries, Inc. (NYSE:MLI) | 21 | 1 | 4 |
| Allegheny Technologies Incorporated (NYSE:ATI) | 19 | 1 | 2 |
| Sims Metal Management Ltd (ADR) (NYSE:SMS) | 6 | 0 | 0 |
| Worthington Industries, Inc. (NYSE:WOR) | 7 | 0 | 5 |
| Carpenter Technology Corporation (NYSE:CRS) | 18 | 1 | 6 |
With the results shown by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading activity, and Chart Industries, Inc. (NASDAQ:GTLS) is an important part of this process.
