Is Alcoa Inc (NYSE:AA) a hedge fund stalwart?
Now, according to many investors, hedge funds are viewed as delayed, outdated investment tools of a period lost to current times. Although there are over 8,000 hedge funds trading today, this site focuses on the aristocrats of this club, around 525 funds. It is widely held that this group has its hands on most of the smart money’s total capital, and by watching their best stock picks, we’ve determined a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as necessary, positive insider trading activity is another way to analyze the world of equities. As the old adage goes: there are plenty of reasons for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
Now that that’s out of the way, we’re going to analyze the recent info for Alcoa Inc (NYSE:AA).
What have hedge funds been doing with Alcoa Inc (NYSE:AA)?
At the end of the second quarter, a total of 23 of the hedge funds we track were long in this stock, a change of 10% from the first 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 substantially.
With a general bullishness amongst the titans, particular hedge funds have been driving this bullishness. OZ Management, managed by Daniel S. Och, created the largest position in Alcoa Inc (NYSE:AA). OZ Management had 54.1 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $52.7 million position during the quarter. The other funds with brand new AA positions are Ron Gutfleish’s Elm Ridge Capital, Daniel S. Och’s OZ Management, and Ken Griffin’s Citadel Investment Group.
What do corporate executives and insiders think about Alcoa Inc (NYSE:AA)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Alcoa Inc (NYSE:AA) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Alcoa Inc (NYSE:AA). These stocks are Noranda Aluminum Holding Corporation (NYSE:NOR), Century Aluminum Co (NASDAQ:CENX), Kaiser Aluminum Corp. (NASDAQ:KALU), Alumina Limited (ADR) (NYSE:AWC), and Aluminum Corp. of China Limited (ADR) (NYSE:ACH). This group of stocks belong to the aluminum industry and their market caps match AA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Noranda Aluminum Holding Corporation (NYSE:NOR) | 10 | 0 | 0 |
| Century Aluminum Co (NASDAQ:CENX) | 10 | 0 | 0 |
| Kaiser Aluminum Corp. (NASDAQ:KALU) | 16 | 0 | 0 |
| Alumina Limited (ADR) (NYSE:AWC) | 0 | 0 | |
| Aluminum Corp. of China Limited (ADR) (NYSE:ACH) | 3 | 0 | 0 |
Using the results explained by the previously mentioned strategies, average investors should always pay attention to hedge fund and insider trading sentiment, and Alcoa Inc (NYSE:AA) shareholders fit into this picture quite nicely.
