United States Steel Corporation (X): 2 Crucial Indicators To Watch

United States Steel Corporation (NYSE:X) has seen a decrease in activity from the world’s largest hedge funds in recent months.

In the eyes of most stock holders, hedge funds are assumed to be slow, old financial tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the moguls of this club, around 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total asset base, and by monitoring their highest performing equity investments, we have figured out a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped 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 topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as beneficial, positive insider trading sentiment is a second way to break down the marketplace. There are plenty of motivations for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the impressive potential of this strategy if investors know what to do (learn more here).

Now, we’re going to take a glance at the key action regarding United States Steel Corporation (NYSE:X).

What have hedge funds been doing with United States Steel Corporation (NYSE:X)?

At the end of the fourth quarter, a total of 18 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully.

According to our comprehensive database, D. E. Shaw’s D E Shaw had the largest call position in United States Steel Corporation (NYSE:X), worth close to $54.6 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Jabre Capital Partners, managed by Philippe Jabre, which held a $48.6 million call position; the fund has 4.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.

Judging by the fact that United States Steel Corporation (NYSE:X) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of funds that elected to cut their full holdings at the end of the year. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest investment of all the hedgies we track, totaling about $7.6 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dropped about $5.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in United States Steel Corporation (NYSE:X)

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past half-year. Over the latest half-year time period, United States Steel Corporation (NYSE:X) has seen zero unique insiders buying, and zero 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 United States Steel Corporation (NYSE:X). These stocks are Ternium S.A. (ADR) (NYSE:TX), Harsco Corporation (NYSE:HSC), Steel Dynamics, Inc. (NASDAQ:STLD), Grupo Simec S.A.B. de C.V. (ADR) (NYSEAMEX:SIM), and Mechel OAO (ADR) (NYSE:MTL). This group of stocks belong to the steel & iron industry and their market caps are similar to X’s market cap.

With the returns shown by Insider Monkey’s research, retail investors should always monitor hedge fund and insider trading sentiment, and United States Steel Corporation (NYSE:X) shareholders fit into this picture quite nicely.

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