Century Aluminum Co (CENX): Insiders Aren’t Crazy About It

Century Aluminum Co (NASDAQ:CENX) was in 7 hedge funds’ portfolio at the end of December. CENX investors should be aware of a decrease in enthusiasm from smart money of late. There were 10 hedge funds in our database with CENX holdings at the end of the previous quarter.

In today’s marketplace, there are a multitude of indicators shareholders can use to track publicly traded companies. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a healthy amount (see just how much).

Just as important, positive insider trading sentiment is another way to parse down the world of equities. Obviously, there are many incentives for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, it’s important to take a peek at the latest action surrounding Century Aluminum Co (NASDAQ:CENX).

What have hedge funds been doing with Century Aluminum Co (NASDAQ:CENX)?

Heading into 2013, a total of 7 of the hedge funds we track were long in this stock, a change of -30% from the third quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Century Aluminum Co (NASDAQ:CENX). Royce & Associates has a $13.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $2.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Israel Englander’s Millennium Management, Mario Gabelli’s GAMCO Investors and Ken Griffin’s Citadel Investment Group.

Because Century Aluminum Co (NASDAQ:CENX) has witnessed declining sentiment from the smart money, logic holds that there was a specific group of hedgies that elected to cut their entire stakes heading into 2013. Interestingly, Robert Bishop’s Impala Asset Management said goodbye to the largest position of the “upper crust” of funds we track, comprising an estimated $5.7 million in stock., and Joel Greenblatt of Gotham Asset Management was right behind this move, as the fund said goodbye to about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 3 funds heading into 2013.

Insider trading activity in Century Aluminum Co (NASDAQ:CENX)

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, Century Aluminum Co (NASDAQ:CENX) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Century Aluminum Co (NASDAQ:CENX). These stocks are Alcoa Inc (NYSE:AA), Aluminum Corp. of China Limited (ADR) (NYSE:ACH), Alumina Limited (ADR) (NYSE:AWC), Noranda Aluminum Holding Corporation (NYSE:NOR), and Kaiser Aluminum Corp. (NASDAQ:KALU). This group of stocks are the members of the aluminum industry and their market caps resemble CENX’s market cap.

With the returns shown by the aforementioned time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Century Aluminum Co (NASDAQ:CENX) applies perfectly to this mantra.

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