Materion Corp (NYSE:MTRN) investors should pay attention to an increase in hedge fund interest in recent months.
If you’d ask most investors, hedge funds are viewed as slow, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we choose to focus on the top tier of this group, about 450 funds. It is widely believed that this group controls most of all hedge funds’ total asset base, and by keeping an eye on their best equity investments, we have found a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as important, positive insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are lots of motivations for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).
Keeping this in mind, it’s important to take a gander at the key action regarding Materion Corp (NYSE:MTRN).
How are hedge funds trading Materion Corp (NYSE:MTRN)?
Heading into 2013, a total of 12 of the hedge funds we track were bullish in this stock, a change of 20% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Materion Corp (NYSE:MTRN). GAMCO Investors has a $33 million position in the stock, comprising 0.2% of its 13F portfolio. On GAMCO Investors’s heels is Jeffrey Gendell of Tontine Asset Management, with a $4 million position; 0% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Now, key hedge funds were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the most outsized position in Materion Corp (NYSE:MTRN). Two Sigma Advisors had 1 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also made a $0 million investment in the stock during the quarter.
What do corporate executives and insiders think about Materion Corp (NYSE:MTRN)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past half-year. Over the latest half-year time period, Materion Corp (NYSE:MTRN) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Materion Corp (NYSE:MTRN). These stocks are Taseko Mines Limited (USA) (NYSEAMEX:TGB), Denison Mines Corp (USA) (NYSEAMEX:DNN), McEwen Mining Inc (NYSE:MUX), MFC Industrial Ltd (NYSE:MIL), and Platinum Group Metals Limited (USA) (NYSEAMEX:PLG). This group of stocks are the members of the industrial metals & minerals industry and their market caps are similar to MTRN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Taseko Mines Limited (USA) (NYSEAMEX:TGB)||2||0||0|
|Denison Mines Corp (USA) (NYSEAMEX:DNN)||7||0||0|
|McEwen Mining Inc (NYSE:MUX)||4||1||1|
|MFC Industrial Ltd (NYSE:MIL)||9||0||0|
|Platinum Group Metals Limited (USA) (NYSEAMEX:PLG)||2||0||0|
With the returns exhibited by Insider Monkey’s time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and Materion Corp (NYSE:MTRN) is no exception.