Is AK Steel Holding Corporation (AKS) Going to Burn These Hedge Funds?

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AK Steel Holding Corporation (NYSE:AKS) has seen a decrease in support from the world’s most elite money managers of late.

If you’d ask most stock holders, hedge funds are perceived as slow, old investment tools of years past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the aristocrats of this group, close to 450 funds. It is widely believed that this group controls most of all hedge funds’ total capital, and by keeping an eye on their highest performing equity investments, we have formulated a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

AK Steel Holding Corporation (NYSE:AKS)Just as beneficial, positive insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action regarding AK Steel Holding Corporation (NYSE:AKS).

Hedge fund activity in AK Steel Holding Corporation (NYSE:AKS)

Heading into Q2, a total of 14 of the hedge funds we track held long positions in this stock, a change of -36% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the largest position in AK Steel Holding Corporation (NYSE:AKS), worth close to $15.2 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $3.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Brian Taylor’s Pine River Capital Management, Boaz Weinstein’s Saba Capital and Jim Simons’s Renaissance Technologies.

Due to the fact that AK Steel Holding Corporation (NYSE:AKS) has witnessed declining sentiment from hedge fund managers, logic holds that there were a few money managers that slashed their full holdings at the end of the first quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management dropped the largest investment of the “upper crust” of funds we key on, valued at about $225.1 million in stock., and John Burbank of Passport Capital was right behind this move, as the fund cut about $21.1 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 8 funds at the end of the first quarter.

What do corporate executives and insiders think about AK Steel Holding Corporation (NYSE:AKS)?

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time period, AK Steel Holding Corporation (NYSE:AKS) has experienced 6 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to AK Steel Holding Corporation (NYSE:AKS). These stocks are Universal Stainless & Alloy Products (NASDAQ:USAP), Metals USA Holdings Corp (NYSE:MUSA), Northwest Pipe Company (NASDAQ:NWPX), Insteel Industries Inc (NASDAQ:IIIN), and Gibraltar Industries Inc (NASDAQ:ROCK). This group of stocks belong to the steel & iron industry and their market caps are similar to AKS’s market cap.

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