Is Steel Dynamics, Inc. (STLD) A Good Stock To Buy?

It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Steel Dynamics, Inc. (NASDAQ:STLD) during the quarter below.

Steel Dynamics, Inc. (NASDAQ:STLD) investors should be aware of a decrease in enthusiasm from smart money recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as SolarCity Corp (NASDAQ:SCTY), GoPro Inc (NASDAQ:GPRO), and AECOM (NYSE:ACM) to gather more data points.

If you’d ask most traders, hedge funds are viewed as worthless, outdated financial vehicles of the past. While there are over 8000 funds with their doors open today, Our researchers look at the leaders of this group, approximately 700 funds. These investment experts administer the lion’s share of the smart money’s total asset base, and by paying attention to their first-class picks, Insider Monkey has unearthed numerous investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, we’re going to go over the key action surrounding Steel Dynamics, Inc. (NASDAQ:STLD).

How have hedgies been trading Steel Dynamics, Inc. (NASDAQ:STLD)?

Heading into Q4, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 20% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Balyasny Asset Management, managed by Dmitry Balyasny, holds the largest position in Steel Dynamics, Inc. (NASDAQ:STLD). Balyasny Asset Management has a $90.7 million position in the stock, comprising 0.7% of its 13F portfolio. On Balyasny Asset Management’s heels is Legg Mason Capital Management, holding an $82.1 million position; 1.7% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management, and Jonathan Barrett and Paul Segal’s Luminus Management.