Is it smart to be bullish on NewMarket Corporation (NYSE:NEU)?
To the average investor, there are dozens of indicators investors can use to track the equity markets. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outpace the market by a solid margin (see just how much).
Equally as key, optimistic insider trading sentiment is a second way to look at the investments you’re interested in. Obviously, there are lots of stimuli for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if “monkeys” know what to do (learn more here).
Furthermore, let’s discuss the recent info surrounding NewMarket Corporation (NYSE:NEU).
How have hedgies been trading NewMarket Corporation (NYSE:NEU)?
At Q2’s end, a total of 11 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
When using filings from the hedgies we track, D. E. Shaw’s D E Shaw had the largest position in NewMarket Corporation (NYSE:NEU), worth close to $52.5 million, accounting for 0.1% of its total 13F portfolio. On D E Shaw’s heels is Royce & Associates, managed by Chuck Royce, which held a $42.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Mario Gabelli’s GAMCO Investors, Clint Carlson’s Carlson Capital and D. E. Shaw’s D E Shaw.
Due to the fact NewMarket Corporation (NYSE:NEU) has experienced a fall in interest from the top-tier hedge fund industry, it’s safe to say that there exists a select few money managers that slashed their entire stakes in Q1. Interestingly, Israel Englander’s Millennium Management dumped the largest investment of the “upper crust” of funds we watch, worth close to $3.3 million in stock. Mike Vranos’s fund, Ellington, also sold off its stock, about $0.6 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds in Q1.
What do corporate executives and insiders think about NewMarket Corporation (NYSE:NEU)?
Legal insider trading, particularly when it’s bullish, is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last half-year time frame, NewMarket Corporation (NYSE:NEU) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to NewMarket Corporation (NYSE:NEU). These stocks are Rockwood Holdings, Inc. (NYSE:ROC), PolyOne Corporation (NYSE:POL), RPM International Inc. (NYSE:RPM), Methanex Corporation (USA) (NASDAQ:MEOH), and Cytec Industries Inc (NYSE:CYT). This group of stocks belong to the specialty chemicals industry and their market caps are similar to NEU’s market cap.