Is NewMarket Corporation (NYSE:NEU) a good investment now? Money managers are betting on the stock. The number of long hedge fund bets improved by 1 in recent months.
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Just as integral, positive insider trading sentiment is another way to parse down the stock market universe. As the old adage goes: there are a number of stimuli for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
Consequently, let’s take a look at the recent action surrounding NewMarket Corporation (NYSE:NEU).
How have hedgies been trading NewMarket Corporation (NYSE:NEU)?
Heading into 2013, a total of 13 of the hedge funds we track were long in this stock, a change of 8% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially.
Of the funds we track, D. E. Shaw’s D E Shaw had the largest position in NewMarket Corporation (NYSE:NEU), worth close to $56 million, accounting for 0.1% of its total 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $18 million position; 0% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Israel Englander’s Millennium Management, David Costen Haley’s HBK Investments and Chuck Royce’s Royce & Associates.
Consequently, some big names were leading the bulls’ herd. HBK Investments, managed by David Costen Haley, established the most valuable position in NewMarket Corporation (NYSE:NEU). HBK Investments had 2 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $0 million position during the quarter. The other funds with brand new NEU positions are Steven Cohen’s SAC Capital Advisors and Mike Vranos’s Ellington.
How are insiders trading NewMarket Corporation (NYSE:NEU)?
Bullish insider trading is at its handiest when the company in question has seen transactions within the past six months. Over the latest half-year time frame, NewMarket Corporation (NYSE:NEU) has seen 2 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to NewMarket Corporation (NYSE:NEU). These stocks are Rockwood Holdings, Inc. (NYSE:ROC), PolyOne Corporation (NYSE:POL), RPM International Inc. (NYSE:RPM), Methanex Corporation (USA) (NASDAQ:MEOH), and Cytec Industries Inc (NYSE:CYT). This group of stocks belong to the specialty chemicals industry and their market caps are closest to NEU’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Rockwood Holdings, Inc. (NYSE:ROC) | 31 | 0 | 4 |
| PolyOne Corporation (NYSE:POL) | 11 | 0 | 8 |
| RPM International Inc. (NYSE:RPM) | 14 | 0 | 4 |
| Methanex Corporation (USA) (NASDAQ:MEOH) | 13 | 0 | 0 |
| Cytec Industries Inc (NYSE:CYT) | 18 | 0 | 14 |
With the results shown by Insider Monkey’s time-tested strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and NewMarket Corporation (NYSE:NEU) is no exception.
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