Is Steel Dynamics, Inc. (NASDAQ:STLD) a buy here? Hedge funds are taking a bullish view. The number of bullish hedge fund positions went up by 3 in recent months.
In today’s marketplace, there are a multitude of gauges shareholders can use to monitor the equity markets. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can trounce their index-focused peers by a healthy amount (see just how much).
Just as key, optimistic insider trading sentiment is another way to break down the investments you’re interested in. Obviously, there are many stimuli for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
Consequently, it’s important to take a glance at the key action encompassing Steel Dynamics, Inc. (NASDAQ:STLD).
What have hedge funds been doing with Steel Dynamics, Inc. (NASDAQ:STLD)?
At year’s end, a total of 16 of the hedge funds we track were bullish in this stock, a change of 23% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Cliff Asness’s AQR Capital Management had the biggest position in Steel Dynamics, Inc. (NASDAQ:STLD), worth close to $38 million, comprising 0.2% of its total 13F portfolio. Coming in second is David Dreman of Dreman Value Management, with a $26 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include John Burbank’s Passport Capital, D. E. Shaw’s D E Shaw and Dmitry Balyasny’s Balyasny Asset Management.
As one would reasonably expect, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most valuable position in Steel Dynamics, Inc. (NASDAQ:STLD). Balyasny Asset Management had 10 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $3 million position during the quarter. The following funds were also among the new STLD investors: Sean Cullinan’s Point State Capital, Mark A. Nordlicht’s Platinum Management, and Steven Cohen’s SAC Capital Advisors.
How have insiders been trading Steel Dynamics, Inc. (NASDAQ:STLD)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, Steel Dynamics, Inc. (NASDAQ:STLD) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey’s tactics, retail investors should always pay attention to hedge fund and insider trading sentiment, and Steel Dynamics, Inc. (NASDAQ:STLD) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.