Is Accuride Corporation (ACW) Going to Burn These Hedge Funds?

Page 1 of 2

Is Accuride Corporation (NYSE:ACW) going to take off soon? Hedge funds are in a bullish mood. The number of bullish hedge fund bets increased by 3 lately.

Accuride Corporation (NYSE:ACW)To most stock holders, hedge funds are assumed to be worthless, old financial tools of the past. While there are more than 8000 funds with their doors open at present, we hone in on the leaders of this group, around 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by tracking their highest performing picks, we have discovered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as key, optimistic insider trading sentiment is a second way to break down the stock market universe. There are many stimuli for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).

Consequently, we’re going to take a peek at the latest action surrounding Accuride Corporation (NYSE:ACW).

What does the smart money think about Accuride Corporation (NYSE:ACW)?

At the end of the first quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 43% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Christopher Shackelton and Adam Gray’s Coliseum Capital had the most valuable position in Accuride Corporation (NYSE:ACW), worth close to $24.6 million, accounting for 14.1% of its total 13F portfolio. Sitting at the No. 2 spot is York Capital Management, managed by James Dinan, which held a $10.8 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Debra Fine’s Fine Capital Partners, Roger Keith Long’s Otter Creek Management and D. E. Shaw’s D E Shaw.

As aggregate interest increased, specific money managers have jumped into Accuride Corporation (NYSE:ACW) headfirst. York Capital Management, managed by James Dinan, established the biggest position in Accuride Corporation (NYSE:ACW). York Capital Management had 10.8 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new ACW investors: Mike Vranos’s Ellington, Neil Chriss’s Hutchin Hill Capital, and Ken Griffin’s Citadel Investment Group.

How are insiders trading Accuride Corporation (NYSE:ACW)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, Accuride Corporation (NYSE:ACW) has seen 4 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Accuride Corporation (NYSE:ACW). These stocks are Navistar International Corp (NYSE:NAV), Supreme Industries, Inc. (NYSEAMEX:STS), Hyster-Yale Materials Handling Inc (NYSE:HY), Wabash National Corporation (NYSE:WNC), and Spartan Motors Inc (NASDAQ:SPAR). All of these stocks are in the trucks & other vehicles industry and their market caps match ACW’s market cap.

Page 1 of 2