Is USG Corporation (NYSE:USG) a buy, sell, or hold? Hedge funds are getting less bullish. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
In the eyes of most shareholders, hedge funds are seen as slow, old investment vehicles of the past. While there are greater than 8000 funds trading at the moment, we look at the masters of this group, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by watching their best stock picks, we have formulated a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 (see the details here).
Just as beneficial, bullish insider trading activity is a second way to break down the investments you’re interested in. There are plenty of stimuli for an insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
Consequently, let’s take a glance at the recent action encompassing USG Corporation (NYSE:USG).
Hedge fund activity in USG Corporation (NYSE:USG)
At the end of the first quarter, a total of 26 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, Warren Buffett’s Berkshire Hathaway had the largest position in USG Corporation (NYSE:USG), worth close to $451.4 million, accounting for 0.5% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $22.2 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Donald Chiboucis’s Columbus Circle Investors, Don Morgan’s Brigade Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Seeing as USG Corporation (NYSE:USG) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there exists a select few hedgies that elected to cut their positions entirely last quarter. It’s worth mentioning that Crispin Odey’s Odey Asset Management Group dumped the largest position of the 450+ funds we watch, valued at close to $6 million in stock.. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also cut its call options., about $5.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading USG Corporation (NYSE:USG)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, USG Corporation (NYSE:USG) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to USG Corporation (NYSE:USG). These stocks are Masco Corporation (NYSE:MAS), Vulcan Materials Company (NYSE:VMC), Owens Corning (NYSE:OC), Martin Marietta Materials, Inc. (NYSE:MLM), and Armstrong World Industries, Inc. (NYSE:AWI). All of these stocks are in the general building materials industry and their market caps match USG’s market cap.