Is LSB Industries, Inc. (LXU) Going to Burn These Hedge Funds?

Is LSB Industries, Inc. (NYSE:LXU) ready to rally soon? Investors who are in the know are in a pessimistic mood. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience

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With these “truths” under our belt, it’s important to take a look at the latest action regarding LSB Industries, Inc. (NYSE:LXU).

What have hedge funds been doing with LSB Industries, Inc. (NYSE:LXU)?

At Q1’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in LSB Industries, Inc. (NYSE:LXU), worth close to $39.6 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Martin Whitman of Third Avenue Management, with a $34.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Because LSB Industries, Inc. (NYSE:LXU) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that elected to cut their positions entirely last quarter. At the top of the heap, Philip Hempleman’s Ardsley Partners sold off the biggest stake of the “upper crust” of funds we watch, worth close to $1.1 million in stock., and Peter Algert and Kevin Coldiron of Algert Coldiron Investors was right behind this move, as the fund dumped about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading LSB Industries, Inc. (NYSE:LXU)?

Bullish insider trading is best served when the company in question has experienced transactions within the past six months. Over the last half-year time period, LSB Industries, Inc. (NYSE:LXU) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to LSB Industries, Inc. (NYSE:LXU). These stocks are Balchem Corporation (NASDAQ:BCPC), Solazyme Inc (NASDAQ:SZYM), FutureFuel Corp. (NYSE:FF), Rentech, Inc. (NYSEAMEX:RTK), and A. Schulman Inc (NASDAQ:SHLM). This group of stocks are in the chemicals – major diversified industry and their market caps are similar to LXU’s market cap.

With the returns demonstrated by Insider Monkey’s strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and LSB Industries, Inc. (NYSE:LXU) is no exception.

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