Mechel OAO (ADR) (MTL): Insiders Are Dumping, Should You?: Ternium S.A. (ADR) (TX), Harsco Corporation (HSC)

Mechel OAO (ADR) (NYSE:MTL) was in 10 hedge funds’ portfolio at the end of December. MTL investors should be aware of an increase in activity from the world’s largest hedge funds lately. There were 8 hedge funds in our database with MTL holdings at the end of the previous quarter.


In the 21st century investor’s toolkit, there are a multitude of methods shareholders can use to track publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the broader indices by a superb amount (see just how much).

Equally as beneficial, positive insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are many incentives for an executive to cut shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if you know what to do (learn more here).

With these “truths” under our belt, we’re going to take a peek at the latest action regarding Mechel OAO (ADR) (NYSE:MTL).

What have hedge funds been doing with Mechel OAO (ADR) (NYSE:MTL)?

Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of 25% from the third quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Mechel OAO (ADR) (NYSE:MTL). Renaissance Technologies has a $12 million position in the stock, comprising 0% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which held a $2 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Philippe Jabre’s Jabre Capital Partners, David Costen Haley’s HBK Investments and Jane Mendillo’s Harvard Management Co.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Jabre Capital Partners, managed by Philippe Jabre, created the largest position in Mechel OAO (ADR) (NYSE:MTL). Jabre Capital Partners had 1 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also initiated a $1 million position during the quarter. The following funds were also among the new MTL investors: Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies, and Cliff Asness’s AQR Capital Management.

Insider trading activity in Mechel OAO (ADR) (NYSE:MTL)

Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the last six-month time frame, Mechel OAO (ADR) (NYSE:MTL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Mechel OAO (ADR) (NYSE:MTL). These stocks are Ternium S.A. (ADR) (NYSE:TX), Harsco Corporation (NYSE:HSC), Steel Dynamics, Inc. (NASDAQ:STLD), Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM), and United States Steel Corporation (NYSE:X). This group of stocks are in the steel & iron industry and their market caps resemble MTL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Ternium S.A. (ADR) (NYSE:TX) 10 0 0
Harsco Corporation (NYSE:HSC) 17 0 2
Steel Dynamics, Inc. (NASDAQ:STLD) 16 0 2
Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM) 1 0 0
United States Steel Corporation (NYSE:X) 18 0 0

With the returns exhibited by our time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Mechel OAO (ADR) (NYSE:MTL) applies perfectly to this mantra.

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