Is Olympic Steel, Inc. (ZEUS) Going to Burn These Hedge Funds?

Olympic Steel, Inc. (NASDAQ:ZEUS) has experienced a decrease in activity from the world’s largest hedge funds recently.

According to most shareholders, hedge funds are perceived as underperforming, old investment vehicles of the past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the upper echelon of this group, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by monitoring their top stock picks, we have brought to light a few investment strategies that have historically outstripped the broader indices. 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 started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as key, positive insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are lots of motivations for an insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).

Consequently, it’s important to take a gander at the key action encompassing Olympic Steel, Inc. (NASDAQ:ZEUS).

What have hedge funds been doing with Olympic Steel, Inc. (NASDAQ:ZEUS)?

In preparation for this quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of -17% from one quarter earlier. 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.

Olympic Steel, Inc. (NASDAQ:ZEUS)Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Olympic Steel, Inc. (NASDAQ:ZEUS), worth close to $31.3 million, accounting for 0.1% of its total 13F portfolio. Coming in second is PEAK6 Capital Management, managed by Matthew Hulsizer, which held a $1.2 million call position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include D. E. Shaw’s D E Shaw, David Cohen and Harold Levy’s Iridian Asset Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that Olympic Steel, Inc. (NASDAQ:ZEUS) has witnessed bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of fund managers who were dropping their positions entirely at the end of the first quarter. Interestingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest investment of the 450+ funds we watch, valued at close to $0.5 million in stock.. Charles Davidson’s fund, Wexford Capital, also dumped its stock, about $0.2 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds at the end of the first quarter.

Insider trading activity in Olympic Steel, Inc. (NASDAQ:ZEUS)

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, Olympic Steel, Inc. (NASDAQ:ZEUS) has experienced 3 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 Olympic Steel, Inc. (NASDAQ:ZEUS). These stocks are Park-Ohio Holdings Corp. (NASDAQ:PKOH), Gulf Island Fabrication, Inc. (NASDAQ:GIFI), Dynamic Materials Corporation (NASDAQ:BOOM), Tower International Inc (NYSE:TOWR), and Graham Corporation (NYSEAMEX:GHM). This group of stocks are the members of the metal fabrication industry and their market caps resemble ZEUS’s market cap.