Huntsman Corporation (NYSE:HUN) was in 29 hedge funds’ portfolio at the end of the first quarter of 2013. HUN has experienced a decrease in support from the world’s most elite money managers in recent months. There were 31 hedge funds in our database with HUN positions at the end of the previous quarter.
In the eyes of most stock holders, hedge funds are perceived as slow, old investment tools of years past. While there are over 8000 funds in operation today, we choose to focus on the upper echelon of this club, around 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total capital, and by keeping an eye on their top investments, we have brought to light a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed 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 (see all of our picks from August).
Just as integral, positive insider trading activity is another way to parse down the world of equities. There are many incentives for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
Consequently, let’s take a peek at the key action surrounding Huntsman Corporation (NYSE:HUN).
What does the smart money think about Huntsman Corporation (NYSE:HUN)?
Heading into Q2, a total of 29 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, Passport Capital, managed by John Burbank, holds the largest position in Huntsman Corporation (NYSE:HUN). Passport Capital has a $158.6 million position in the stock, comprising 6.3% of its 13F portfolio. Sitting at the No. 2 spot is Doug Silverman and Alexander Klabin of Senator Investment Group, with a $148.7 million position; 1.8% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include David Tepper’s Appaloosa Management LP, Rob Citrone’s Discovery Capital Management and David Dreman’s Dreman Value Management.
Due to the fact that Huntsman Corporation (NYSE:HUN) has witnessed declining sentiment from the smart money, logic holds that there exists a select few fund managers who were dropping their entire stakes heading into Q2. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest position of the 450+ funds we key on, worth close to $31.1 million in stock., and Timothy S. Peterson of Regiment Capital was right behind this move, as the fund sold off about $25.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds heading into Q2.
What do corporate executives and insiders think about Huntsman Corporation (NYSE:HUN)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Huntsman Corporation (NYSE:HUN) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Huntsman Corporation (NYSE:HUN). These stocks are FMC Corp (NYSE:FMC), Celanese Corporation (NYSE:CE), Ashland Inc. (NYSE:ASH) and Braskem SA (ADR) (NYSE:BAK). This group of stocks are the members of the chemicals – major diversified industry and their market caps are closest to HUN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|FMC Corp (NYSE:FMC)||23||0||1|
|Celanese Corporation (NYSE:CE)||21||0||2|
|Ashland Inc. (NYSE:ASH)||32||0||4|
|Braskem SA (ADR) (NYSE:BAK)||5||0||0|
With the returns exhibited by Insider Monkey’s research, retail investors must always watch hedge fund and insider trading sentiment, and Huntsman Corporation (NYSE:HUN) shareholders fit into this picture quite nicely.