Five Top-Performering Stocks Hedge Funds Overlooked

#2 United States Steel Corporation (NYSE:X)

– Investors With Long Positions (as of December 31): 22

– Aggregate Value of Investors’ Holdings (as of December 31): $66.41 million

Despite its ownership among investors declining by three during the last quarter of 2015, United States Steel Corporation (NYSE:X) was the most popular stock in this list among hedge funds tracked by us going into 2016. AQR Capital Management will be really happy with its performance this year, since apart from initiating a stake in AngloGold Ashanti Limited, the fund also more than doubled its stake in United States Steel Corporation to almost 1.68 million shares during the fourth quarter. Almost the entire gain of 102.43% that United States Steel Corporation (NYSE:X)’s stock registered during the first quarter came in the month of March after the US announced a hefty anti-dumping duty on foreign steel producers. Though United States Steel Corporation (NYSE:X) and the US Steel industry as a whole welcomed this move, it wasn’t fully satisfied by it. That’s because the government imposed a 266% duty on Chinese steel imports, but the duty it levied on steel imports from other countries was pretty low in comparison. However, analysts think that this decision alone is enough for US steel producers to grow their market share significantly and improve their financial performance.

#1 Sibanye Gold Ltd (ADR) (NYSE:SBGL)

– Investors With Long Positions (as of December 31): 5

– Aggregate Value of Investors’ Holdings (as of December 31): $17.5 million

The three funds covered by us which sold off their entire stakes in Sibanye Gold Ltd (ADR) (NYSE:SBGL) during the October-December period might be regretting their decision this year. That’s because shares of the South Africa-based gold mining company have shot through the roof in 2016, appreciating by over 150% during the first quarter itself. Unlike other gold mining stocks, the reason behind Sibanye Gold Ltd (ADR) (NYSE:SBGL)’s up move is not the increase in gold prices alone, but the weakness in South African Rand (ZAR) since mid-January has also contributed significantly to the gains the stock has registered this year. However, a lot of analysts think that this rally might be soon coming to an end because the stock appears fully valued at current prices. On March 11, RBC Capital analyst Richard Hatch released a note to his client in which he reiterated his ‘Sector Perform’ rating on the stock. In the note, Mr. Hatch also highlighted that among the gold miners that operate in South Africa, Sibanye Gold Ltd’s stock is most at risk for a pullback since the company has 100% exposure to that country and there are chances that its soon-to-be-acquired platinum division can underperform. According to recent reports, Sibanye Gold Ltd will change its name to Sibanye Resources in the near future because its expanding its presence from gold to other commodities like platinum, coal and uranium.

Disclosure: None