Should You Sell FMC Corp (FMC)?
Is FMC Corp (NYSE:FMC) a good investment?
If you were to ask many traders, hedge funds are perceived as delayed, old investment vehicles of a forgotten age. Although there are more than 8,000 hedge funds trading currently, Insider Monkey aim at the masters of this group, close to 525 funds. It is widely held that this group oversees the majority of all hedge funds' total assets, and by monitoring their highest performing equity investments, we've formulated a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as key, positive insider trading activity is another way to look at the world of equities. Obviously, there are a number of reasons for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, we're going to study the newest info about FMC Corp (NYSE:FMC).
What does the smart money think about FMC Corp (NYSE:FMC)?
At the end of the second quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, David Cohen and Harold Levy's Iridian Asset Management had the largest position in FMC Corp (NYSE:FMC), worth close to $160.7 million, accounting for 2% of its total 13F portfolio. The second largest stake is held by Dinakar Singh of TPG-AXON Management LP, with a $117.5 million position; the fund has 8.3% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Matt McLennan's First Eagle Investment Management, Martin D. Sass's MD Sass and Robert B. Gillam's McKinley Capital Management.
As FMC Corp (NYSE:FMC) has faced dropping sentiment from the top-tier hedge fund industry, logic holds that there exists a select few funds that decided to sell off their positions entirely at the end of the second quarter. Intriguingly, Jim Simons's Renaissance Technologies dropped the largest position of all the hedgies we key on, totaling about $18.1 million in stock. Matthew Tewksbury's fund, Stevens Capital Management, also said goodbye to its stock, about $5.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with FMC Corp (NYSE:FMC)?
Insider buying is particularly usable when the company we're looking at has seen transactions within the past half-year. Over the latest half-year time frame, FMC Corp (NYSE:FMC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to FMC Corp (NYSE:FMC). These stocks are Braskem SA (ADR) (NYSE:BAK), Valhi, Inc. (NYSE:VHI), Eastman Chemical Company (NYSE:EMN), Ashland Inc. (NYSE:ASH), and Celanese Corporation (NYSE:CE). This group of stocks belong to the chemicals - major diversified industry and their market caps are similar to FMC's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Braskem SA (ADR) (NYSE:BAK)
Valhi, Inc. (NYSE:VHI)
Eastman Chemical Company (NYSE:EMN)
Ashland Inc. (NYSE:ASH)
Celanese Corporation (NYSE:CE)
Using the returns explained by our strategies, average investors must always pay attention to hedge fund and insider trading activity, and FMC Corp (NYSE:FMC) applies perfectly to this mantra.