Eagle Materials, Inc. (EXP): Are Hedge Funds Right About This Stock?

Eagle Materials, Inc. (NYSE:EXP) investors should be aware of an increase in activity from the world’s largest hedge funds of late.

If you’d ask most shareholders, hedge funds are viewed as slow, old investment vehicles of years past. While there are more than 8000 funds trading today, we hone in on the crème de la crème of this club, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by monitoring their best stock picks, we have found a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 23.3 percentage points in 8 months (see the details here).

Just as beneficial, bullish insider trading activity is another way to break down the stock market universe. Obviously, there are lots of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if shareholders understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a look at the key action regarding Eagle Materials, Inc. (NYSE:EXP).

What does the smart money think about Eagle Materials, Inc. (NYSE:EXP)?

In preparation for this quarter, a total of 30 of the hedge funds we track were bullish in this stock, a change of 11% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Sean Cullinan’s Point State Capital had the most valuable position in Eagle Materials, Inc. (NYSE:EXP), worth close to $93.8 million, accounting for 1.4% of its total 13F portfolio. On Point State Capital’s heels is John Lykouretzos of Hoplite Capital Management, with a $86.6 million position; 2.8% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Donald Chiboucis’s Columbus Circle Investors, Abby Flamholz and Yehuda Blinder’s ADAR Investment Management and Wayne Cooperman’s Cobalt Capital Management.

As industrywide interest jumped, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Eagle Materials, Inc. (NYSE:EXP). Balyasny Asset Management had 12 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also made a $10.5 million investment in the stock during the quarter. The other funds with new positions in the stock are John Murphy’s Alydar Capital, Robert Pohly’s Samlyn Capital, and Eric Chen’s Antipodean Advisors.

What have insiders been doing with Eagle Materials, Inc. (NYSE:EXP)?

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last half-year time period, Eagle Materials, Inc. (NYSE:EXP) has seen 1 unique insiders buying, and 13 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Eagle Materials, Inc. (NYSE:EXP). These stocks are CRH PLC (ADR) (NYSE:CRH), Cemex SAB de CV (ADR) (NYSE:CX), and Texas Industries, Inc. (NYSE:TXI). This group of stocks are in the cement industry and their market caps are similar to EXP’s market cap.