MRC Global Inc (NYSE:MRC) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. MRC has seen an increase in enthusiasm from smart money lately. There were 6 hedge funds in our database with MRC holdings at the end of the previous quarter.
If you’d ask most traders, hedge funds are viewed as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds trading at present, we hone in on the elite of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by paying attention to their best investments, we have formulated a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as important, optimistic insider trading sentiment is a second way to parse down the stock market universe. There are lots of motivations for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, it’s important to take a look at the key action encompassing MRC Global Inc (NYSE:MRC).
How are hedge funds trading MRC Global Inc (NYSE:MRC)?
At the end of the fourth quarter, a total of 11 of the hedge funds we track were long in this stock, a change of 83% from the third quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Pennant Capital Management, managed by Alan Fournier, holds the most valuable position in MRC Global Inc (NYSE:MRC). Pennant Capital Management has a $194 million position in the stock, comprising 4.1% of its 13F portfolio. Sitting at the No. 2 spot is Select Equity Group, managed by Robert Joseph Caruso, which held a $177 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group and Richard Driehaus’s Driehaus Capital.
As aggregate interest increased, key money managers were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the largest position in MRC Global Inc (NYSE:MRC). Adage Capital Management had 29 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $5 million investment in the stock during the quarter. The following funds were also among the new MRC investors: John Overdeck and David Siegel’s Two Sigma Advisors, Paul Tudor Jones’s Tudor Investment Corp, and Steven Cohen’s SAC Capital Advisors.
What have insiders been doing with MRC Global Inc (NYSE:MRC)?
Insider buying is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time frame, MRC Global Inc (NYSE:MRC) has seen zero unique insiders buying, and 5 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 MRC Global Inc (NYSE:MRC). These stocks are Stanley Black & Decker, Inc. (NYSE:SWK), RBC Bearings Incorporated (NASDAQ:ROLL), Proto Labs Inc (NYSE:PRLB), The Timken Company (NYSE:TKR), and Kennametal Inc. (NYSE:KMT). All of these stocks are in the machine tools & accessories industry and their market caps are similar to MRC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Stanley Black & Decker, Inc. (NYSE:SWK)||24||1||15|
|RBC Bearings Incorporated (NASDAQ:ROLL)||5||0||3|
|Proto Labs Inc (NYSE:PRLB)||8||1||15|
|The Timken Company (NYSE:TKR)||23||0||1|
|Kennametal Inc. (NYSE:KMT)||13||0||8|
With the results exhibited by our tactics, everyday investors must always watch hedge fund and insider trading sentiment, and MRC Global Inc (NYSE:MRC) is no exception.