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Kaiser Aluminum Corp. (KALU): Are Hedge Funds Right About This Stock?: Alcoa Inc (AA), Aluminum Corp. of China Limited (ADR) (ACH)

Kaiser Aluminum Corp. (NASDAQ:KALU) was in 16 hedge funds’ portfolio at the end of December. KALU shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 13 hedge funds in our database with KALU positions at the end of the previous quarter. Kaiser Aluminum Corp. (NASDAQ:KALU)To the average investor, there are plenty of methods investors can use to watch publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform their index-focused peers by a healthy amount (see just how much). Equally as key, optimistic insider trading sentiment is another way to break down the investments you’re interested in. There are plenty of incentives for an insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here). Consequently, let’s take a gander at the recent action regarding Kaiser Aluminum Corp. (NASDAQ:KALU).

How have hedgies been trading Kaiser Aluminum Corp. (NASDAQ:KALU)?

In preparation for this year, a total of 16 of the hedge funds we track held long positions in this stock, a change of 23% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly. When looking at the hedgies we track, Carlson Capital, managed by Clint Carlson, holds the biggest position in Kaiser Aluminum Corp. (NASDAQ:KALU). Carlson Capital has a $27 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which held a $19 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Michael Price’s MFP Investors, Martin Whitman’s Third Avenue Management and John Burbank’s Passport Capital. As industrywide interest jumped, some big names have jumped into Kaiser Aluminum Corp. (NASDAQ:KALU) headfirst. Driehaus Capital, managed by Richard Driehaus, established the largest position in Kaiser Aluminum Corp. (NASDAQ:KALU). Driehaus Capital had 4 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $2 million position during the quarter. The only other fund with a new position in the stock is Steven Cohen’s SAC Capital Advisors.

What have insiders been doing with Kaiser Aluminum Corp. (NASDAQ:KALU)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Kaiser Aluminum Corp. (NASDAQ:KALU) has experienced zero unique insiders buying, and 4 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 Kaiser Aluminum Corp. (NASDAQ:KALU). These stocks are Alcoa Inc (NYSE:AA), Aluminum Corp. of China Limited (ADR) (NYSE:ACH), Noranda Aluminum Holding Corporation (NYSE:NOR), Alumina Limited (ADR) (NYSE:AWC), and Century Aluminum Co (NASDAQ:CENX). This group of stocks are in the aluminum industry and their market caps resemble KALU’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Alcoa Inc (NYSE:AA) 20 2 1
Aluminum Corp. of China Limited (ADR) (NYSE:ACH) 4 0 0
Noranda Aluminum Holding Corporation (NYSE:NOR) 8 2 0
Alumina Limited (ADR) (NYSE:AWC) 5 0 0
Century Aluminum Co (NASDAQ:CENX) 7 0 0

With the returns shown by our time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Kaiser Aluminum Corp. (NASDAQ:KALU) is an important part of this process. Click here to learn more about Insider Monkey’s Hedge Fund Newsletter Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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