Cliffs Natural Resources Inc (NYSE:CLF) investors should be aware of an increase in hedge fund sentiment recently.
In today’s marketplace, there are tons of metrics investors can use to track publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the broader indices by a superb margin (see just how much).
Just as important, positive insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a variety of stimuli for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).
Keeping this in mind, we’re going to take a gander at the latest action regarding Cliffs Natural Resources Inc (NYSE:CLF).
What does the smart money think about Cliffs Natural Resources Inc (NYSE:CLF)?
At year’s end, a total of 23 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings substantially.
Of the funds we track, Steven Cohen’s SAC Capital Advisors had the biggest position in Cliffs Natural Resources Inc (NYSE:CLF), worth close to $115.6 million, comprising 0.6% of its total 13F portfolio. On SAC Capital Advisors’s heels is D. E. Shaw of D E Shaw, with a $47.6 million call position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Ken Fisher’s Fisher Asset Management, and Dmitry Balyasny’s Balyasny Asset Management.
Now, key hedge funds were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, created the most outsized position in Cliffs Natural Resources Inc (NYSE:CLF). Alyeska Investment Group had 19.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $4.7 million position during the quarter. The following funds were also among the new CLF investors: Glenn Russell Dubin’s Highbridge Capital Management, Michael Novogratz’s Fortress Investment Group, and Chuck Royce’s Royce & Associates.
How have insiders been trading Cliffs Natural Resources Inc (NYSE:CLF)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, Cliffs Natural Resources Inc (NYSE:CLF) has seen 1 unique insiders purchasing, and 5 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 Cliffs Natural Resources Inc (NYSE:CLF). These stocks are Alliance Resource Partners, L.P. (NASDAQ:ARLP), Tahoe Resources Inc (NYSE:TAHO), Natural Resource Partners LP (NYSE:NRP), Compass Minerals International, Inc. (NYSE:CMP), and Titanium Metals Corp (NYSE:TIE). This group of stocks are the members of the industrial metals & minerals industry and their market caps resemble CLF’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Alliance Resource Partners, L.P. (NASDAQ:ARLP) | 4 | 1 | 4 |
| Tahoe Resources Inc (NYSE:TAHO) | 5 | 0 | 0 |
| Natural Resource Partners LP (NYSE:NRP) | 4 | 4 | 0 |
| Compass Minerals International, Inc. (NYSE:CMP) | 6 | 0 | 3 |
| Titanium Metals Corp (NYSE:TIE) | 7 | 2 | 0 |
With the returns shown by the aforementioned studies, retail investors must always monitor hedge fund and insider trading activity, and Cliffs Natural Resources Inc (NYSE:CLF) is an important part of this process.
