Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. SCHN has seen a decrease in enthusiasm from smart money of late. There were 12 hedge funds in our database with SCHN holdings at the end of the previous quarter.
To the average investor, there are a multitude of methods investors can use to analyze Mr. Market. Some of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outperform the S&P 500 by a superb amount (see just how much).
Just as integral, optimistic insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are plenty of reasons for an executive to get rid of shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
With these “truths” under our belt, let’s take a look at the recent action regarding Schnitzer Steel Industries, Inc. (NASDAQ:SCHN).
How have hedgies been trading Schnitzer Steel Industries, Inc. (NASDAQ:SCHN)?
At year’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), worth close to $111 million, accounting for 0.4% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $14 million position; 0% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Joel Greenblatt’s Gotham Asset Management.
Seeing as Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) has witnessed a declination in interest from the smart money, we can see that there was a specific group of funds who were dropping their entire stakes in Q4. It’s worth mentioning that Mike Vranos’s Ellington dropped the largest investment of the “upper crust” of funds we key on, comprising an estimated $0 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dumped its stock, about $0 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds in Q4.
How have insiders been trading Schnitzer Steel Industries, Inc. (NASDAQ:SCHN)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Schnitzer Steel Industries, Inc. (NASDAQ:SCHN). These stocks are Park-Ohio Holdings Corp. (NASDAQ:PKOH), AZZ Incorporated (NYSE:AZZ), A M Castle and Co (NYSE:CAS), Matthews International Corp (NASDAQ:MATW), and Haynes International, Inc. (NASDAQ:HAYN). This group of stocks are in the metal fabrication industry and their market caps resemble SCHN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Park-Ohio Holdings Corp. (NASDAQ:PKOH)||4||2||5|
|AZZ Incorporated (NYSE:AZZ)||15||1||9|
|A M Castle and Co (NYSE:CAS)||6||1||1|
|Matthews International Corp (NASDAQ:MATW)||9||0||0|
|Haynes International, Inc. (NASDAQ:HAYN)||8||0||1|
With the returns shown by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is an important part of this process.