Is Noranda Aluminum Holding Corporation (NYSE:NOR) undervalued? Investors who are in the know are taking a pessimistic view. The number of long hedge fund bets decreased by 2 lately.
To the average investor, there are tons of metrics market participants can use to track stocks. A couple of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outpace the S&P 500 by a superb amount (see just how much).
Just as important, bullish insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are a number of incentives for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).
Now, we’re going to take a peek at the key action surrounding Noranda Aluminum Holding Corporation (NYSE:NOR).
What does the smart money think about Noranda Aluminum Holding Corporation (NYSE:NOR)?
At year’s end, a total of 8 of the hedge funds we track held long positions in this stock, a change of -20% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, D. E. Shaw’s D E Shaw had the most valuable position in Noranda Aluminum Holding Corporation (NYSE:NOR), worth close to $7.4 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $3.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
Since Noranda Aluminum Holding Corporation (NYSE:NOR) has experienced a declination in interest from the smart money, logic holds that there was a specific group of fund managers who sold off their positions entirely last quarter. It’s worth mentioning that Israel Englander’s Catapult Capital Management dropped the biggest stake of the 450+ funds we monitor, valued at an estimated $0.4 million in stock., and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund dumped about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.
What have insiders been doing with Noranda Aluminum Holding Corporation (NYSE:NOR)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, Noranda Aluminum Holding Corporation (NYSE:NOR) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Noranda Aluminum Holding Corporation (NYSE:NOR). These stocks are Alcoa Inc (NYSE:AA), Aluminum Corp. of China Limited (ADR) (NYSE:ACH), Alumina Limited (ADR) (NYSE:AWC), Kaiser Aluminum Corp. (NASDAQ:KALU), and Century Aluminum Co (NASDAQ:CENX). This group of stocks are the members of the aluminum industry and their market caps are similar to NOR’s market cap.