Here is What Hedge Funds Think About Quaker Chemical Corp (KWR)

World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.

Quaker Chemical Corp (NYSE:KWR) was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. KWR has seen an increase in enthusiasm from smart money lately. There were 9 hedge funds in our database with KWR positions 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 Petrobras Argentina SA ADR (NYSE:PZE), Bottomline Technologies (NASDAQ:EPAY), and Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) to gather more data points.

In today’s marketplace there are plenty of indicators investors have at their disposal to analyze stocks. A duo of the most innovative indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top money managers can outperform their index-focused peers by a very impressive margin (see the details here).

Keeping this in mind, we’re going to view the new action encompassing Quaker Chemical Corp (NYSE:KWR).

How have hedgies been trading Quaker Chemical Corp (NYSE:KWR)?

At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in Quaker Chemical Corp (NYSE:KWR), worth close to $82 million, corresponding to 0.4% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $12.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Israel Englander’s Millennium Management, Chao Ku’s Nine Chapters Capital Management and Roger Ibbotson’s Zebra Capital Management.

With a general bullishness amongst the heavyweights, some big names have jumped into Quaker Chemical Corp (NYSE:KWR) headfirst. Millennium Management assembled the most outsized position in Quaker Chemical Corp (NYSE:KWR). Millennium Management had $3.3 million invested in the company at the end of the quarter. Nine Chapters Capital Management also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks similar to Quaker Chemical Corp (NYSE:KWR). We will take a look at Petrobras Argentina SA ADR (NYSE:PZE), Bottomline Technologies (NASDAQ:EPAY), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and Comfort Systems USA, Inc. (NYSE:FIX). All of these stocks’ market caps match KWR’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $113 million, compared to $102 million in KWR’s case. Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) is the most popular stock in this table. On the other hand Bottomline Technologies (NASDAQ:EPAY) is the least popular one with only 7 bullish hedge fund positions. Quaker Chemical Corp (NYSE:KWR) 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 AJRD might be a better candidate to consider a long position.