Is Reliance Steel & Aluminum (NYSE:RS) a buy here? Prominent investors are taking an optimistic view. The number of bullish hedge fund positions inched up by 4 lately.
To the average investor, there are a multitude of methods market participants can use to watch the equity markets. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can trounce the market by a solid amount (see just how much).
Equally as integral, bullish insider trading sentiment is a second way to break down the world of equities. There are plenty of incentives for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).
With all of this in mind, it’s important to take a glance at the latest action surrounding Reliance Steel & Aluminum (NYSE:RS).
Hedge fund activity in Reliance Steel & Aluminum (NYSE:RS)
At the end of the fourth quarter, a total of 18 of the hedge funds we track held long positions in this stock, a change of 29% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Reliance Steel & Aluminum (NYSE:RS). Royce & Associates has a $367.5 million position in the stock, comprising 1.2% of its 13F portfolio. On Royce & Associates’s heels is Phill Gross and Robert Atchinson of Adage Capital Management, with a $78.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management and Steven Cohen’s SAC Capital Advisors.
Now, some big names were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Reliance Steel & Aluminum (NYSE:RS). Arrowstreet Capital had 36.3 million invested in the company at the end of the quarter. Richard S. Meisenberg’s ACK Asset Management also initiated a $8.1 million position during the quarter. The following funds were also among the new RS investors: Alexander Mitchell’s Scopus Asset Management, SAC Subsidiary’s CR Intrinsic Investors, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How are insiders trading Reliance Steel & Aluminum (NYSE:RS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the latest six-month time period, Reliance Steel & Aluminum (NYSE:RS) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Reliance Steel & Aluminum (NYSE:RS). These stocks are Worthington Industries, Inc. (NYSE:WOR), Chart Industries, Inc. (NASDAQ:GTLS), Carpenter Technology Corporation (NYSE:CRS), Allegheny Technologies Incorporated (NYSE:ATI), and Valmont Industries, Inc. (NYSE:VMI). This group of stocks belong to the metal fabrication industry and their market caps are similar to RS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Worthington Industries, Inc. (NYSE:WOR)||7||0||5|
|Chart Industries, Inc. (NASDAQ:GTLS)||9||0||6|
|Carpenter Technology Corporation (NYSE:CRS)||18||1||6|
|Allegheny Technologies Incorporated (NYSE:ATI)||19||1||2|
|Valmont Industries, Inc. (NYSE:VMI)||23||0||3|
With the results exhibited by our research, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Reliance Steel & Aluminum (NYSE:RS) is no exception.