At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Companhia Siderurgica Nacional (ADR) (NYSE:SID) makes for a good investment right now.
Is Companhia Siderurgica Nacional (ADR) (NYSE:SID) worth your attention right now? Money managers are getting less bullish. The number of long hedge fund bets retreated by 4 in recent months. SID was in 4 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with SID positions at the end of the previous quarter. At the end of this article we will also compare SID to other stocks, including Rent-A-Center Inc (NASDAQ:RCII), Nevro Corp (NYSE:NVRO), and Surgical Care Affiliates Inc (NASDAQ:SCAI) to get a better sense of its popularity.
Today there are many formulas investors put to use to evaluate stocks. A duo of the less utilized formulas are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the S&P 500 by a significant margin (see the details here).
Keeping this in mind, let’s take a peek at the recent action encompassing Companhia Siderurgica Nacional (ADR) (NYSE:SID).
How are hedge funds trading Companhia Siderurgica Nacional (ADR) (NYSE:SID)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -50% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Tyrian Investments, managed by Orlando Muyshondt, holds the largest position in Companhia Siderurgica Nacional (ADR) (NYSE:SID). Tyrian Investments has a $0.6 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions consist of Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.
Because Companhia Siderurgica Nacional (ADR) (NYSE:SID) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there exists a select few hedgies that elected to cut their positions entirely heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dumped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, comprising about $2.5 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dropped its stock, about $0.6 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 4 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Companhia Siderurgica Nacional (ADR) (NYSE:SID). These stocks are Rent-A-Center Inc (NASDAQ:RCII), Nevro Corp (NYSE:NVRO), Surgical Care Affiliates Inc (NASDAQ:SCAI), and TeleTech Holdings, Inc. (NASDAQ:TTEC). All of these stocks’ market caps are similar to SID’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was just $1 million in SID’s case. Rent-A-Center Inc (NASDAQ:RCII) is the most popular stock in this table. On the other hand Surgical Care Affiliates Inc (NASDAQ:SCAI) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Companhia Siderurgica Nacional (ADR) (NYSE:SID) is even less popular than SCAI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.