Globe Specialty Metals, Inc. (NASDAQ:GSM) investors should be aware of a decrease in hedge fund interest in recent months.
According to most traders, hedge funds are perceived as unimportant, old financial tools of the past. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the upper echelon of this club, close to 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total capital, and by paying attention to their best equity investments, we have deciphered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, bullish insider trading activity is another way to break down the world of equities. Just as you’d expect, there are a number of motivations for an executive to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).
Now, let’s take a gander at the latest action surrounding Globe Specialty Metals, Inc. (NASDAQ:GSM).
What have hedge funds been doing with Globe Specialty Metals, Inc. (NASDAQ:GSM)?
At the end of the first quarter, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Globe Specialty Metals, Inc. (NASDAQ:GSM). Royce & Associates has a $135.7 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Blue Harbour Group, managed by Clifton S. Robbins, which held a $42.6 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Jay Petschek and Steven Major’s Corsair Capital Management, Richard Chilton’s Chilton Investment Company and Israel Englander’s Millennium Management.
Seeing as Globe Specialty Metals, Inc. (NASDAQ:GSM) has witnessed falling interest from hedge fund managers, logic holds that there were a few money managers that slashed their full holdings last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the biggest investment of all the hedgies we watch, comprising about $2.1 million in stock. These moves are important to note, as total hedge fund interest was cut by 1 funds last quarter.
What do corporate executives and insiders think about Globe Specialty Metals, Inc. (NASDAQ:GSM)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, Globe Specialty Metals, Inc. (NASDAQ:GSM) has seen zero 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 Globe Specialty Metals, Inc. (NASDAQ:GSM). These stocks are Stillwater Mining Company (NYSE:SWC), U.S. Silica Holdings Inc (NYSE:SLCA), Arch Coal Inc (NYSE:ACI), Cloud Peak Energy Inc. (NYSE:CLD), and AMCOL International Corporation (NYSE:ACO). This group of stocks belong to the industrial metals & minerals industry and their market caps match GSM’s market cap.