A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on Schnitzer Steel Industries, Inc. (NASDAQ:SCHN).
Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) was in 18 hedge funds’ portfolios at the end of December. SCHN has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 19 hedge funds in our database with SCHN holdings at the end of the previous quarter. Our calculations also showed that SCHN isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a glance at the key hedge fund action encompassing Schnitzer Steel Industries, Inc. (NASDAQ:SCHN).
How are hedge funds trading Schnitzer Steel Industries, Inc. (NASDAQ:SCHN)?
At the end of the fourth quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in SCHN a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), which was worth $8.7 million at the end of the fourth quarter. On the second spot was Vertex One Asset Management which amassed $6.8 million worth of shares. Moreover, Millennium Management, GLG Partners, and Citadel Investment Group were also bullish on Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), allocating a large percentage of their portfolios to this stock.
Because Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) has witnessed declining sentiment from hedge fund managers, logic holds that there was a specific group of funds that slashed their positions entirely in the third quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the largest investment of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $2.5 million in stock, and Thomas Bailard’s Bailard Inc was right behind this move, as the fund said goodbye to about $0.7 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Schnitzer Steel Industries, Inc. (NASDAQ:SCHN). We will take a look at Fortuna Silver Mines Inc. (NYSE:FSM), Comtech Telecommunications Corp. (NASDAQ:CMTL), Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), and ViewRay, Inc. (NASDAQ:VRAY). This group of stocks’ market caps resemble SCHN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSM | 15 | 42158 | 4 |
| CMTL | 14 | 97683 | 0 |
| AUPH | 8 | 36467 | 2 |
| VRAY | 21 | 177852 | -2 |
| Average | 14.5 | 88540 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $41 million in SCHN’s case. ViewRay, Inc. (NASDAQ:VRAY) is the most popular stock in this table. On the other hand Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) is the least popular one with only 8 bullish hedge fund positions. Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SCHN wasn’t nearly as popular as these 15 stock and hedge funds that were betting on SCHN were disappointed as the stock returned 15.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
