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Is Gencorp Inc (NYSE:GY) Going to Burn These Hedge Funds?

Gencorp Inc (NYSE:GY) was in 21 hedge funds’ portfolio at the end of December. GY investors should be aware of an increase in enthusiasm from smart money of late. There were 16 hedge funds in our database with GY positions at the end of the previous quarter.

In the financial world, there are plenty of metrics market participants can use to watch stocks. A duo of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who followthe top picks of the elite hedge fund managers can outpace their index-focused peers by a healthy margin (see just how much).

Gencorp Inc (NYSE:GY)

Equally as key, optimistic insider trading sentiment is another way to parse down the stock market universe. There are many incentives for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Keeping this in mind, it’s important to take a peek at the key action regarding Gencorp Inc (NYSE:GY).

What have hedge funds been doing with Gencorp Inc (NYSE:GY)?

In preparation for this year, a total of 21 of the hedge funds we track held long positions in this stock, a change of 31% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings significantly.

Of the funds we track, Richard McGuire’s Marcato Capital Management had the most valuable position in Gencorp Inc (NYSE:GY), worth close to $53 million, accounting for 6.9% of its total 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which held a $43 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Warren Lichtenstein’s Steel Partners, Michael A. Price and Amos Meron’s Empyrean Capital Partners and Michael Blitzer’s Kingstown Capital Management.

As aggregate interest increased, key hedge funds were breaking ground themselves. Kingstown Capital Management, managed by Michael Blitzer, established the biggest position in Gencorp Inc (NYSE:GY). Kingstown Capital Management had 14 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $5 million position during the quarter. The other funds with brand new GY positions are Glenn Russell Dubin’s Highbridge Capital Management, D. E. Shaw’s D E Shaw, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

How have insiders been trading Gencorp Inc (NYSE:GY)?

Insider buying is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, Gencorp Inc (NYSE:GY) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned research, retail investors should always pay attention to hedge fund and insider trading activity, and Gencorp Inc (NYSE:GY) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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