Is RTI International Metals, Inc. (RTI) Going to Burn These Hedge Funds?

RTI International Metals, Inc. (NYSE:RTI) was in 5 hedge funds’ portfolio at the end of the fourth quarter of 2012. RTI investors should be aware of an increase in hedge fund sentiment of late. There were 3 hedge funds in our database with RTI holdings at the end of the previous quarter.

David Shaw

In the financial world, there are many gauges market participants can use to track stocks. A couple of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can beat the S&P 500 by a very impressive amount (see just how much).

Just as key, optimistic insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if you know where to look (learn more here).

With all of this in mind, it’s important to take a glance at the recent action encompassing RTI International Metals, Inc. (NYSE:RTI).

How are hedge funds trading RTI International Metals, Inc. (NYSE:RTI)?

At year’s end, a total of 5 of the hedge funds we track were long in this stock, a change of 67% from the third quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in RTI International Metals, Inc. (NYSE:RTI), worth close to $20.2 million, accounting for 0.1% of its total 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $8.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Richard Driehaus’s Driehaus Capital, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, assembled the most valuable position in RTI International Metals, Inc. (NYSE:RTI). Driehaus Capital had 0.8 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.3 million investment in the stock during the quarter.

What do corporate executives and insiders think about RTI International Metals, Inc. (NYSE:RTI)?

Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, RTI International Metals, Inc. (NYSE:RTI) has seen 1 unique insiders purchasing, and 5 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 RTI International Metals, Inc. (NYSE:RTI). These stocks are Applied Industrial Technologies (NYSE:AIT), Newport Corporation (NASDAQ:NEWP), Wesco Aircraft Holdings Inc (NYSE:WAIR), Susser Petroleum Partners LP (NYSE:SUSP), and DXP Enterprises Inc (NASDAQ:DXPE). This group of stocks are the members of the industrial equipment wholesale industry and their market caps resemble RTI’s market cap.