Is Albemarle Corporation (ALB) Going to Burn These Hedge Funds?

Is Albemarle Corporation (NYSE:ALB) worth your attention right now? Money managers are taking a bearish view. The number of bullish hedge fund positions were trimmed by 3 in recent months.

In the 21st century investor’s toolkit, there are many metrics shareholders can use to monitor stocks. Some of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a very impressive margin (see just how much).

Equally as beneficial, bullish insider trading activity is another way to break down the financial markets. There are many reasons for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if piggybackers know where to look (learn more here).

Keeping this in mind, it’s important to take a gander at the latest action surrounding Albemarle Corporation (NYSE:ALB).

What have hedge funds been doing with Albemarle Corporation (NYSE:ALB)?

At Q1’s end, a total of 17 of the hedge funds we track were bullish in this stock, a change of -15% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Southpoint Capital Advisors, managed by Rob Butts and Josh Clark, holds the biggest position in Albemarle Corporation (NYSE:ALB). Southpoint Capital Advisors has a $93.8 million position in the stock, comprising 6% of its 13F portfolio. The second largest stake is held by Thomas E. Claugus of GMT Capital, with a $67.9 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Jeffrey Ubben’s ValueAct Capital, Martin D. Sass’s MD Sass and Chuck Royce’s Royce & Associates.

Because Albemarle Corporation (NYSE:ALB) has witnessed declining sentiment from hedge fund managers, logic holds that there exists a select few funds who were dropping their full holdings last quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group cut the biggest stake of the “upper crust” of funds we monitor, worth an estimated $35.2 million in stock.. Robert Joseph Caruso’s fund, Select Equity Group, also dropped its stock, about $19.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.

How have insiders been trading Albemarle Corporation (NYSE:ALB)?

Insider buying is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time frame, Albemarle Corporation (NYSE:ALB) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Albemarle Corporation (NYSE:ALB). These stocks are Westlake Chemical Corporation (NYSE:WLK), International Flavors & Fragrances Inc (NYSE:IFF), Rockwood Holdings, Inc. (NYSE:ROC), W.R. Grace & Co. (NYSE:GRA), and The Valspar Corporation (NYSE:VAL). This group of stocks belong to the specialty chemicals industry and their market caps are closest to ALB’s market cap.

With the results exhibited by the aforementioned studies, retail investors should always watch hedge fund and insider trading sentiment, and Albemarle Corporation (NYSE:ALB) applies perfectly to this mantra.

Click here to learn why you should track hedge funds