To most traders, hedge funds are assumed to be slow, old financial tools of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the moguls of this group, around 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total capital, and by keeping an eye on their best stock picks, we have determined a number of investment strategies that have historically outpaced Mr. Market. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as key, bullish insider trading activity is a second way to parse down the world of equities. There are a variety of motivations for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).
Keeping this in mind, let’s take a peek at the recent action surrounding General Steel Holdings Inc (NYSE:GSI).
What have hedge funds been doing with General Steel Holdings Inc (NYSE:GSI)?
Heading into 2013, a total of 2 of the hedge funds we track were bullish in this stock, a change of 100% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Consequently, key money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in General Steel Holdings Inc (NYSE:GSI). Citadel Investment Group had less than $1 million invested in the company at the end of the quarter.
What do corporate executives and insiders think about General Steel Holdings Inc (NYSE:GSI)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the last six-month time frame, General Steel Holdings Inc (NYSE:GSI) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to General Steel Holdings Inc (NYSE:GSI). These stocks are Ossen Innovation Co Ltd (ADR) (NASDAQ:OSN), China Gerui Adv Mtals Grp Ltd (NASDAQ:CHOP), Synalloy Corporation (NASDAQ:SYNL), Friedman Industries (NYSEAMEX:FRD), and Sutor Technology Group Ltd. (NASDAQ:SUTR). This group of stocks are in the steel & iron industry and their market caps are similar to GSI’s market cap.
