Gerdau SA (ADR) (NYSE:GGB): Insiders Are Dumping, Should You? – POSCO (ADR) (NYSE:PKX), ArcelorMittal (ADR) (NYSE:MT)

Gerdau SA (ADR) (NYSE:GGB) was in 12 hedge funds’ portfolio at the end of December. GGB investors should pay attention to an increase in hedge fund interest recently. There were 8 hedge funds in our database with GGB holdings at the end of the previous quarter.

In the financial world, there are many metrics shareholders can use to analyze Mr. Market. A duo of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can beat the market by a superb amount (see just how much).

Gerdau SA (ADR) (NYSE:GGB)

Equally as important, optimistic insider trading sentiment is a second way to parse down the world of equities. As the old adage goes: there are plenty of reasons for an insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).

Keeping this in mind, we’re going to take a peek at the recent action surrounding Gerdau SA (ADR) (NYSE:GGB).

How are hedge funds trading Gerdau SA (ADR) (NYSE:GGB)?

In preparation for this year, a total of 12 of the hedge funds we track were bullish in this stock, a change of 50% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in Gerdau SA (ADR) (NYSE:GGB), worth close to $31 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Fisher Asset Management, managed by Ken Fisher, which held a $28 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Jason Adler’s AlphaBet Management.

As one would reasonably expect, some big names have jumped into Gerdau SA (ADR) (NYSE:GGB) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, created the most outsized position in Gerdau SA (ADR) (NYSE:GGB). Adage Capital Management had 31 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $25 million position during the quarter. The following funds were also among the new GGB investors: Israel Englander’s Millennium Management, David Costen Haley’s HBK Investments, and Mike Vranos’s Ellington.

How are insiders trading Gerdau SA (ADR) (NYSE:GGB)?

Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Gerdau SA (ADR) (NYSE:GGB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Gerdau SA (ADR) (NYSE:GGB). These stocks are Companhia Siderurgica Nacional (ADR) (NYSE:SID), POSCO (ADR) (NYSE:PKX), Tenaris S.A. (ADR) (NYSE:TS), ArcelorMittal (ADR) (NYSE:MT), and Nucor Corporation (NYSE:NUE). This group of stocks belong to the steel & iron industry and their market caps match GGB’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Companhia Siderurgica Nacional (ADR) (NYSE:SID) 11 0 0
Tenaris S.A. (ADR) (NYSE:TS) 6 0 0
ArcelorMittal (ADR) (NYSE:MT) 7 0 0
Nucor Corporation (NYSE:NUE) 21 0 1

With the results shown by Insider Monkey’s studies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Gerdau SA (ADR) (NYSE:GGB) shareholders fit into this picture quite nicely.