Are you curious what the smart money thinks about Eastman Chemical Company (NYSE:EMN)?
If you were to ask many investors, hedge funds are perceived as delayed, outdated investment tools of an era lost to time. Although there are over 8,000 hedge funds with their doors open in present day, this site looks at the leaders of this club, around 525 funds. It is assumed that this group controls the lion’s share of all hedge funds’ total assets, and by keeping an eye on their best picks, we’ve determined a few investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is another way to analyze the stock market universe. There are many reasons for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this tactic if piggybackers know what to do (learn more here).
Keeping this in mind, let’s discuss the recent info for Eastman Chemical Company (NYSE:EMN).
Hedge fund activity in Eastman Chemical Company (NYSE:EMN)
At the end of the second quarter, a total of 40 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially.
Due to the fact Eastman Chemical Company (NYSE:EMN) has faced a fall in interest from the entirety of the hedge funds we track, logic holds that there exists a select few fund managers that decided to sell off their full holdings in Q1. It’s worth mentioning that John Burbank’s Passport Capital cut the biggest position of the 450+ funds we watch, worth close to $44 million in stock. Eric Bannasch’s fund, Cadian Capital, also sold off its stock, about $42.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Eastman Chemical Company (NYSE:EMN)?
Insider buying made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, Eastman Chemical Company (NYSE:EMN) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Eastman Chemical Company (NYSE:EMN). These stocks are Ashland Inc. (NYSE:ASH), Air Products & Chemicals, Inc. (NYSE:APD), Celanese Corporation (NYSE:CE), FMC Corp (NYSE:FMC), and Sociedad Quimica y Minera (ADR) (NYSE:SQM). This group of stocks belong to the chemicals – major diversified industry and their market caps resemble EMN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Ashland Inc. (NYSE:ASH) | 28 | 0 | 3 |
| Air Products & Chemicals, Inc. (NYSE:APD) | 17 | 0 | 6 |
| Celanese Corporation (NYSE:CE) | 21 | 0 | 0 |
| FMC Corp (NYSE:FMC) | 23 | 0 | 1 |
| Sociedad Quimica y Minera (ADR) (NYSE:SQM) | 11 | 0 | 0 |
Using the returns shown by Insider Monkey’s research, regular investors must always watch hedge fund and insider trading activity, and Eastman Chemical Company (NYSE:EMN) applies perfectly to this mantra.
