We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Albemarle Corporation (NYSE:ALB).
Albemarle Corporation (NYSE:ALB) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. ALB was in 29 hedge funds’ portfolios at the end of September. There were 36 hedge funds in our database with ALB holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Equity Lifestyle Properties, Inc. (NYSE:ELS), Owens Corning (NYSE:OC), and Hubbell Incorporated (NYSE:HUB) to gather more data points.
Follow Albemarle Corp (NYSE:ALB)
Follow Albemarle Corp (NYSE:ALB)
In the 21st century investor’s toolkit there are numerous formulas stock market investors employ to assess publicly traded companies. Some of the most innovative formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the best fund managers can outclass the broader indices by a significant amount (see the details here).
With all of this in mind, we’re going to take a look at the recent action surrounding Albemarle Corporation (NYSE:ALB).
What have hedge funds been doing with Albemarle Corporation (NYSE:ALB)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Gates Capital Management, managed by Jeffrey Gates, holds the most valuable position in Albemarle Corporation (NYSE:ALB). Gates Capital Management has a $154.6 million position in the stock, comprising 6% of its 13F portfolio. On Gates Capital Management’s heels is Ken Griffin of Citadel Investment Group, with a $92.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism contain Steve Cohen’s Point72 Asset Management, Bill Miller’s Legg Mason Capital Management and Ross Margolies’ Stelliam Investment Management.
Judging by the fact that Albemarle Corporation (NYSE:ALB) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their entire stakes last quarter. Interestingly, Neil Chriss’ Hutchin Hill Capital cut the largest stake of all the hedgies tracked by Insider Monkey, comprising about $74.6 million in stock. Jim Simons’s fund, Renaissance Technologies, also sold off its stock, about $24.3 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 7 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Albemarle Corporation (NYSE:ALB) but similarly valued. We will take a look at Equity Lifestyle Properties, Inc. (NYSE:ELS), Owens Corning (NYSE:OC), Hubbell Incorporated (NYSE:HUB), and NRG Energy Inc (NYSE:NRG). This group of stocks’ market caps match ALB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ELS | 13 | 380919 | 1 |
| OC | 45 | 1060238 | 5 |
| HUB | 37 | 539894 | 6 |
| NRG | 31 | 720128 | 0 |
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $675 million. That figure was $662 million in ALB’s case. Owens Corning (NYSE:OC) is the most popular stock in this table. On the other hand Equity Lifestyle Properties, Inc. (NYSE:ELS) is the least popular one with only 13 bullish hedge fund positions. Albemarle Corporation (NYSE:ALB) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OC might be a better candidate to consider a long position.
