Is Owens Corning (NYSE:OC) Going to Burn These Hedge Funds?

Is Owens Corning (NYSE:OC) the right investment to pursue these days? Hedge funds are in an optimistic mood. The number of long hedge fund positions increased by 8 lately.
To most investors, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the crème de la crème of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total capital, and by watching their best picks, we have spotted a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, positive insider trading sentiment is a second way to parse down the financial markets. There are many motivations for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if piggybackers understand what to do (learn more here).
Now, we’re going to take a gander at the latest action regarding Owens Corning (NYSE:OC).

Hedge fund activity in Owens Corning (NYSE:OC)

At year’s end, a total of 36 of the hedge funds we track were long in this stock, a change of 29% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Patrick Halloran’s Wayzata Investment Partners had the biggest position in Owens Corning (NYSE:OC), worth close to $332 million billion, accounting for 42.9% of its total 13F portfolio. On Wayzata Investment Partners’s heels is Blue Ridge Capital, managed by John Griffin, which held a $247 million position; 1.4% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, David Tepper’s Appaloosa Management LP and David Cohen and Harold Levy’s Iridian Asset Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Pennant Capital Management, managed by Alan Fournier, established the biggest position in Owens Corning (NYSE:OC). Pennant Capital Management had 65 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also made a $45 million investment in the stock during the quarter. The other funds with brand new OC positions are Malcolm Fairbairn’s Ascend Capital, Charles Clough’s Clough Capital Partners, and Mark Kingdon’s Kingdon Capital.

What have insiders been doing with Owens Corning (NYSE:OC)?

Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Owens Corning (NYSE:OC) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s studies, retail investors should always monitor hedge fund and insider trading sentiment, and Owens Corning (NYSE:OC) applies perfectly to this mantra.
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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.