Hedge Funds Aren’t Crazy About Westlake Chemical Corporation (WLK) Anymore

Now, according to many market players, hedge funds are seen as useless, old financial vehicles of a forgotten age. Although there are over 8,000 hedge funds in operation currently, this site focuses on the bigwigs of this club, around 525 funds. It is widely held that this group controls the lion’s share of the hedge fund industry’s total assets, and by monitoring their highest performing stock picks, we’ve unearthed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as crucial, positive insider trading sentiment is another way to analyze the world of equities. As the old adage goes: there are many reasons for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

Westlake Chemical Corporation

Thus, it’s important to study the latest info for Westlake Chemical Corporation (NYSE:WLK).

What does the smart money think about Westlake Chemical Corporation (NYSE:WLK)?

At Q2’s end, a total of 26 of the hedge funds we track were long in this stock, a change of -10% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.

Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the largest position in Westlake Chemical Corporation (NYSE:WLK). Royce & Associates has a $265 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $65.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Steven Cohen’s SAC Capital Advisors, Sean Cullinan’s Point State Capital and Clint Carlson’s Carlson Capital.

Judging by the fact that Westlake Chemical Corporation (NYSE:WLK) has faced a fall in interest from the smart money’s best and brightest, it’s safe to say that there exists a select few money managers who sold off their full holdings in Q1. It’s worth mentioning that Jeffrey Vinik’s Vinik Asset Management said goodbye to the largest stake of the 450+ funds we track, worth an estimated $59.5 million in stock, and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund sold off about $32.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds in Q1.

What do corporate executives and insiders think about Westlake Chemical Corporation (NYSE:WLK)?

Legal insider trading, particularly when it’s bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time frame, Westlake Chemical Corporation (NYSE:WLK) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Westlake Chemical Corporation (NYSE:WLK). These stocks are Rockwood Holdings, Inc. (NYSE:ROC), The Valspar Corporation (NYSE:VAL), Albemarle Corporation (NYSE:ALB), W.R. Grace & Co. (NYSE:GRA), and International Flavors & Fragrances Inc (NYSE:IFF). All of these stocks are in the specialty chemicals industry and their market caps are similar to WLK’s market cap.