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Is FreightCar America, Inc. (RAIL) Going to Burn These Hedge Funds?: Guangshen Railway Co. Ltd (ADR) (GSH), American Railcar Industries, Inc. (ARII)

FreightCar America, Inc. (NASDAQ:RAIL) was in 8 hedge funds’ portfolio at the end of December. RAIL shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. There were 8 hedge funds in our database with RAIL holdings at the end of the previous quarter.

FreightCar America, Inc. (NASDAQ:RAIL)To the average investor, there are tons of indicators investors can use to monitor publicly traded companies. Some of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a superb amount (see just how much).

Equally as integral, positive insider trading sentiment is another way to break down the world of equities. Just as you’d expect, there are many stimuli for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the latest action regarding FreightCar America, Inc. (NASDAQ:RAIL).

What does the smart money think about FreightCar America, Inc. (NASDAQ:RAIL)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially.

Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in FreightCar America, Inc. (NASDAQ:RAIL), worth close to $13 million, comprising 0% of its total 13F portfolio. Coming in second is Peter Algert and Kevin Coldiron of Algert Coldiron Investors, with a $2 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Joel Greenblatt’s Gotham Asset Management, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.

Seeing as FreightCar America, Inc. (NASDAQ:RAIL) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers that elected to cut their full holdings last quarter. It’s worth mentioning that Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners dropped the biggest investment of the “upper crust” of funds we key on, totaling about $0 million in stock.. D. E. Shaw’s fund, D E Shaw, also dumped its stock, about $0 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 FreightCar America, Inc. (NASDAQ:RAIL)?

Bullish insider trading is best served when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, FreightCar America, Inc. (NASDAQ:RAIL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to FreightCar America, Inc. (NASDAQ:RAIL). These stocks are Guangshen Railway Co. Ltd (ADR) (NYSE:GSH), American Railcar Industries, Inc. (NASDAQ:ARII), Providence & Worcester Railroad Company (NASDAQ:PWX), Greenbrier Companies Inc (NYSE:GBX), and Pacer International, Inc. (NASDAQ:PACR). This group of stocks are in the railroads industry and their market caps match RAIL’s market cap.

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