W.R. Grace & Co. (GRA): Are Hedge Funds This Stock’s Saving Grace?

W.R. Grace & Co. (NYSE:GRA) is managing to do well as it emerges from its legacy issues. The company expects to complete the acquisition of the Polypropylene Licensing and Catalysts (UNIPOL) business of The Dow Chemical Company (NYSE:DOW). GRA has called for a conference call to discuss the status of the acquisition as well as the timelines for emergence from Chapter 11 bankruptcy. Grace’s plan of reorganization also appears on track as none of the four parties with asbestos-related appeals have opposed it before the deadline.

W.R. Grace & Co. (NYSE:GRA)

How are hedge funds trading W.R. Grace & Co. (NYSE:GRA)?

Hedge funds also appear to share the company’s optimism and the number of hedge funds with investments in the company has risen from 49 at the end of the second quarter to 52 at the end of the third.

Of the funds tracked by Insider Monkey, David Cohen and Harold Levy’s Iridian Asset Management had the No. 1 position in W.R. Grace & Co. (NYSE:GRA), worth close to $361.2 million, accounting for 4.8 percent of its total 13F portfolio. The fund manager is very bullish on the company and has increased the invested amount by 16 percent in the third quarter. Coming in second is John Griffin of Blue Ridge Capital, with a $262.2-million position; 3.1 percent of its portfolio is allocated to the company. Some other peers that hold long positions encompass Richard Chilton’s Chilton Investment Company, James Dinan’s York Capital Management and Jonathan Auerbach’s Hound Partners.

With the general sentiment remaining positive about the company several new hedge funds invested during the third quarter. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, assembled the most valuable position in W.R. Grace & Co. (NYSE:GRA). Senator Investment Group had $118 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also made a $12.4-million investment in the stock during the quarter. The other funds with new positions in the stock are Mark Kingdon’s Kingdon Capital, John A. Levin’s Levin Capital Strategies, and Alok Agrawal’s Bloom Tree Partners.

Are the insiders also bullish about W.R. Grace & Co. (NYSE:GRA)?

Analysis of insider-trading activity over the past 180 days shows that W.R. Grace & Co. (NYSE:GRA) has experienced zero unique insider buys and six insider sales (see the details of insider trades here).

Let us compare W.R. Grace & Co. (NYSE:GRA) with its peers. These stocks are Rockwood Holdings, Inc. (NYSE:ROC), Westlake Chemical Corporation (NYSE:WLK), International Flavors & Fragrances Inc (NYSE:IFF), The Valspar Corporation (NYSE:VAL), and Albemarle Corporation (NYSE:ALB). These groups of stocks belong to the specialty chemicals industry and their market caps match GRA’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Rockwood Holdings, Inc. (NYSE:ROC) 39 0 2
Westlake Chemical Corporation (NYSE:WLK) 34 0 5
International Flavors & Fragrances Inc (NYSE:IFF) 24 0 6
The Valspar Corporation (NYSE:VAL) 27 1 1
Albemarle Corporation (NYSE:ALB) 19 0 0

Among its peers, W.R. Grace & Co. (NYSE:GRA) seems to find more favor with the hedge fun managers, with Rockwood Holdings Inc. (NYSE:ROC) coming a distant second. Insiders also seem to favor W.R. Grace & Co. as well as International Flavors & Fragrances Inc (NYSE:IFF).



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