Precision Castparts Corp. (PCP): Hedge Funds Are Placing Their Bets

Precision Castparts Corp. (NYSE:PCP) manufactures metal components and products like investment castings, fasteners and forgings. Precision Castparts Corp. is present in many segments like aerospace, general industrial, armament, pharmaceutical, chemical processing, oil and gas and other industries. The company provides aero-structures to the aerospace industry, critical components to the industrial gas turbine applications. With three major acquisitions under its belt in 2013, the company is forging ahead. Precision Castparts Corp. (NYSE:PCP) acquired Titanium Metals Corp, Permaswage Holding SAS and Designated Metal Connections Inc in 2013.

Hedgies are very bullish about the company and the number of long hedge fund positions inched up by nine in the last quarter.

Precision Castparts Corp. (NYSE:PCP)

Hedge fund activity in Precision Castparts Corp. (NYSE:PCP)

In preparation for this quarter, 40 of the hedge funds tracked by our friends at Insider Monkey were bullish in this stock, a robust 29-percent increase from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies followed by Insider Monkey, Warren Buffett’s Berkshire Hathaway had the most valuable position in Precision Castparts Corp. (NYSE:PCP), worth close to $449.3 million, accounting for 0.5 percent of its total 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli of GAMCO Investors, with a $198.4-million position; 1.2 percent of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish contain Bain Capital’s Brookside Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’s Renaissance Technologies.

Now, key money managers were breaking ground themselves. Partner Fund Management, managed by Christopher Medlock James, assembled the most valuable position in Precision Castparts Corp. (NYSE:PCP). Partner Fund Management had $52.7 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $11.5-million investment in the stock during the quarter. The other funds with brand new PCP positions are Anand Parekh’s Alyeska Investment Group, Ray Dalio’s Bridgewater Associates, and David Zusman’s Talara Capital Management.

What have insiders been doing with Precision Castparts Corp. (NYSE:PCP)?

Over the last six-month time frame, Precision Castparts Corp. (NYSE:PCP) has seen zero unique insider purchasies and two insider sales (see the details of insider trades here).

Let’s also review hedge-fund and insider activity in other stocks similar to Precision Castparts Corp. (NYSE:PCP). These stocks are Chart Industries, Inc. (NASDAQ:GTLS), Carpenter Technology Corporation (NYSE:CRS), Allegheny Technologies Incorporated (NYSE:ATI), Valmont Industries, Inc. (NYSE:VMI), and Reliance Steel & Aluminum (NYSE:RS). These stocks are members of the metal fabrication industry and their market caps match PCP’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Chart Industries, Inc. (NASDAQ:GTLS) 19 0 4
Carpenter Technology Corporation (NYSE:CRS) 12 0 6
Allegheny Technologies Incorporated (NYSE:ATI) 16 0 1
Valmont Industries, Inc. (NYSE:VMI) 28 0 2
Reliance Steel & Aluminum (NYSE:RS) 23 0 6

Precision Castparts Corp. (NYSE:PCP) is a favorite among the peer group with the hedge-fund managers. Insiders favor Reliance Steel & Aluminum (NYSE:RS) and Carpenter Technology Corporation (NYSE:CRS) over Precision Castparts Corp.


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