To the average investor, there are plenty of metrics shareholders can use to watch stocks. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the broader indices by a solid margin (see just how much).
Just as crucial, positive insider trading sentiment is a second way to look at the marketplace. Just as you’d expect, there are a number of reasons for an executive to drop shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
Keeping this in mind, let’s examine the latest info for Molycorp Inc (NYSE:MCP).
How are hedge funds trading Molycorp Inc (NYSE:MCP)?
Heading into Q3, a total of 16 of the hedge funds we track were long in this stock, a change of -16% 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 substantially.
When using filings from the hedgies we track, John Griffin’s Blue Ridge Capital had the biggest position in Molycorp Inc (NYSE:MCP), worth close to $17.8 million, comprising 0.2% of its total 13F portfolio. On Blue Ridge Capital’s heels is Royce & Associates, managed by Chuck Royce, which held a $11.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Philippe Laffont’s Coatue Management, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital and Matthew Hulsizer’s PEAK6 Capital Management.
Since Molycorp Inc (NYSE:MCP) has experienced dropping sentiment from upper-tier hedge fund managers, it’s easy to see that there exists a select few hedgies that decided to sell off their positions entirely heading into Q2. Interestingly, Jim Simons’s Renaissance Technologies dropped the largest investment of the “upper crust” of funds we watch, worth about $2.3 million in stock. Phil Frohlich’s fund, Prescott Group Capital Management, also dumped its stock, about $1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q2.
What have insiders been doing with Molycorp Inc (NYSE:MCP)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, Molycorp Inc (NYSE:MCP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Molycorp Inc (NYSE:MCP). These stocks are Denison Mines Corp (USA) (NYSEAMEX:DNN), Taseko Mines Limited (USA) (NYSEAMEX:TGB), Thompson Creek Metals Company Inc (USA) (NYSE:TC), Hi-Crush Partners LP (NYSE:HCLP), and HORSEHEAD HOLDING CORP. (NASDAQ:ZINC). All of these stocks are in the industrial metals & minerals industry and their market caps resemble MCP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Denison Mines Corp (USA) (NYSEAMEX:DNN) | 9 | 0 | 0 |
| Taseko Mines Limited (USA) (NYSEAMEX:TGB) | 3 | 0 | 0 |
| Thompson Creek Metals Company Inc (USA) (NYSE:TC) | 10 | 0 | 0 |
| Hi-Crush Partners LP (NYSE:HCLP) | 3 | 0 | 0 |
| HORSEHEAD HOLDING CORP. (NASDAQ:ZINC) | 8 | 0 | 0 |
Using the returns explained by our strategies, average investors should always watch hedge fund and insider trading activity, and Molycorp Inc (NYSE:MCP) shareholders fit into this picture quite nicely.
