Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Chemtura Corp (NYSE:CHMT).
Is Chemtura Corp (NYSE:CHMT) a superb investment right now? Prominent investors are taking an optimistic view. The number of long hedge fund positions improved by 2 lately. At the end of this article we will also compare CHMT to other stocks including FTI Consulting, Inc. (NYSE:FCN), Oasis Petroleum Inc. (NYSE:OAS), and Main Street Capital Corporation (NYSE:MAIN) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How have hedgies been trading Chemtura Corp (NYSE:CHMT)?
Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 9% increase from the previous quarter. After a steep decline in Q1, hedge fund ownership has now rebounded to sit just under its levels as of December 31, 2015. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Chemtura Corp (NYSE:CHMT). GAMCO Investors has a $178 million position in the stock, comprising 1.2% of its 13F portfolio. Coming in second is Alec Litowitz and Ross Laser of Magnetar Capital, with an $85.6 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Neil Chriss’ Hutchin Hill Capital, Gilchrist Berg’s Water Street Capital and John A. Levin’s Levin Capital Strategies.