This Metric Says You Are Smart to Sell Cytec Industries Inc (CYT)

In today’s marketplace, there are a multitude of methods market participants can use to monitor the equity markets. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outclass their index-focused peers by a very impressive amount (see just how much).

Equally as crucial, optimistic insider trading sentiment is a second way to analyze the stock market universe. Obviously, there are plenty of stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand what to do (learn more here).

Now that that’s out of the way, it’s important to analyze the newest info surrounding Cytec Industries Inc (NYSE:CYT).

Hedge fund activity in Cytec Industries Inc (NYSE:CYT)

At Q2’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes considerably.

When using filings from the hedgies we track, John Burbank’s Passport Capital had the biggest position in Cytec Industries Inc (NYSE:CYT), worth close to $187.8 million, comprising 6.2% of its total 13F portfolio. On Passport Capital’s heels is Ken Fisher of Fisher Asset Management, with a $58.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.

Due to the fact Cytec Industries Inc (NYSE:CYT) has witnessed dropping sentiment from the smart money’s best and brightest, logic holds that there was a specific group of funds who were dropping their entire stakes last quarter. At the top of the heap, Eric Mindich’s Eton Park Capital cut the biggest stake of all the hedgies we watch, comprising about $42 million in stock. Neil Chriss’s fund, Hutchin Hill Capital, also dropped its stock, about $31.5 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds last quarter.

What have insiders been doing with Cytec Industries Inc (NYSE:CYT)?

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest six-month time period, Cytec Industries Inc (NYSE:CYT) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Cytec Industries Inc (NYSE:CYT). These stocks are Cabot Corp (NYSE:CBT), PolyOne Corporation (NYSE:POL), RPM International Inc. (NYSE:RPM), Methanex Corporation (USA) (NASDAQ:MEOH), and NewMarket Corporation (NYSE:NEU). This group of stocks are the members of the specialty chemicals industry and their market caps match CYT’s market cap.