Hedge Funds Are Selling USG Corporation (USG)

is USG Corporation (NYSE:USG) a sell?

If you were to ask many traders, hedge funds are viewed as useless, old financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds in operation today, this site focuses on the top tier of this group, close to 525 funds. Analysts calculate that this group oversees the majority of all hedge funds’ total assets, and by watching their best equity investments, we’ve uncovered a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as necessary, bullish insider trading activity is a second way to analyze the financial markets. Just as you’d expect, there are lots of stimuli for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if you understand what to do (learn more here).

Now that that’s out of the way, it’s important to examine the newest info about USG Corporation (NYSE:USG).

How are hedge funds trading USG Corporation (NYSE:USG)?

At the end of the second quarter, a total of 24 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.

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Judging by the fact that USG Corporation (NYSE:USG) has witnessed bearish sentiment from upper-tier hedge fund managers, it’s safe to say that there was a specific group of fund managers that slashed their positions entirely last quarter. Interestingly, Jim Simons’s Renaissance Technologies dumped the largest stake of all the hedgies we track, valued at an estimated $22.2 million in stock, and Philip Hempleman of Ardsley Partners was right behind this move, as the fund said goodbye to about $9.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds last quarter.

How have insiders been trading USG Corporation (NYSE:USG)?

Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, USG Corporation (NYSE:USG) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to USG Corporation (NYSE:USG). These stocks are Masco Corporation (NYSE:MAS), Vulcan Materials Company (NYSE:VMC), Owens Corning (NYSE:OC), Martin Marietta Materials, Inc. (NYSE:MLM), and Armstrong World Industries, Inc. (NYSE:AWI). This group of stocks belong to the general building materials industry and their market caps resemble USG’s market cap.

Using the results demonstrated by the previously mentioned analyses, regular investors must always watch hedge fund and insider trading activity, and USG Corporation (NYSE:USG) applies perfectly to this mantra.

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