Is Ferro Corporation (NYSE:FOE) a good investment?
To many market players, hedge funds are assumed to be useless, old financial vehicles of an era lost to time. Although there are more than 8,000 hedge funds trading in present day, this site looks at the masters of this club, around 525 funds. It is assumed that this group controls most of the smart money’s total capital, and by tracking their best stock picks, we’ve uncovered a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, bullish insider trading activity is another way to look at the financial markets. Obviously, there are a number of stimuli for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).
Keeping this in mind, let’s examine the newest info for Ferro Corporation (NYSE:FOE).
Hedge fund activity in Ferro Corporation (NYSE:FOE)
At Q2’s end, a total of 20 of the hedge funds we track were bullish in this stock, a change of -5% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
Out of the hedge funds we follow, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Ferro Corporation (NYSE:FOE). GAMCO Investors has a $59.6 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Brigade Capital, managed by Don Morgan, which held a $32.2 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group, Jeffrey Smith’s Starboard Value LP and Douglas Hirsch’s Seneca Capital.
Due to the fact Ferro Corporation (NYSE:FOE) has experienced dropping sentiment from the top-tier hedge fund industry, logic holds that there were a few hedgies that slashed their positions entirely last quarter. Interestingly, Kerr Neilson’s Platinum Asset Management cut the biggest stake of the 450+ funds we monitor, comprising about $1.6 million in stock. Matthew Halbower’s fund, Pentwater Capital Management, also sold off its stock, about $0.6 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.
What have insiders been doing with Ferro Corporation (NYSE:FOE)?
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Ferro Corporation (NYSE:FOE) 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 Ferro Corporation (NYSE:FOE). These stocks are WD-40 Company (NASDAQ:WDFC), Flotek Industries Inc (NYSE:FTK), Quaker Chemical Corp (NYSE:KWR), OM Group, Inc. (NYSE:OMG), and Kraton Performance Polymers Inc (NYSE:KRA). All of these stocks are in the specialty chemicals industry and their market caps resemble FOE’s market cap.
