At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Warrior Met Coal Inc. (NYSE:HCC) makes for a good investment right now.
Warrior Met Coal Inc. (NYSE:HCC) shareholders have witnessed an increase in support from the world’s most elite money managers lately. Warrior Met Coal Inc. (NYSE:HCC) was in 29 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. There were 21 hedge funds in our database with HCC positions at the end of the second quarter. Our calculations also showed that HCC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s view the latest hedge fund action encompassing Warrior Met Coal Inc. (NYSE:HCC).
Martin Whitman of Third Avenue Management
Do Hedge Funds Think HCC Is A Good Stock To Buy Now?
At the end of September, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from the second quarter of 2021. By comparison, 26 hedge funds held shares or bullish call options in HCC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Third Avenue Management was the largest shareholder of Warrior Met Coal Inc. (NYSE:HCC), with a stake worth $40.3 million reported as of the end of September. Trailing Third Avenue Management was Contrarius Investment Management, which amassed a stake valued at $39.4 million. Renaissance Technologies, Waratah Capital Advisors, and Platinum Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to Warrior Met Coal Inc. (NYSE:HCC), around 5.42% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, dishing out 2.02 percent of its 13F equity portfolio to HCC.
As one would reasonably expect, key money managers have jumped into Warrior Met Coal Inc. (NYSE:HCC) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most valuable call position in Warrior Met Coal Inc. (NYSE:HCC). Point72 Asset Management had $7 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $0.9 million position during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Peter Muller’s PDT Partners, and Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Warrior Met Coal Inc. (NYSE:HCC) but similarly valued. We will take a look at FARO Technologies, Inc. (NASDAQ:FARO), Humacyte Inc. (NASDAQ:HUMA), ChemoCentryx Inc (NASDAQ:CCXI), ConnectOne Bancorp Inc (NASDAQ:CNOB), Brookline Bancorp, Inc. (NASDAQ:BRKL), Tompkins Financial Corporation (NYSE:TMP), and Workhorse Group, Inc. (NASDAQ:WKHS). This group of stocks’ market valuations are closest to HCC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FARO | 9 | 143046 | -4 |
| HUMA | 5 | 40333 | 5 |
| CCXI | 17 | 73370 | 3 |
| CNOB | 14 | 46747 | -1 |
| BRKL | 9 | 41795 | -1 |
| TMP | 7 | 3446 | 1 |
| WKHS | 11 | 17638 | -2 |
| Average | 10.3 | 52339 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $222 million in HCC’s case. ChemoCentryx Inc (NASDAQ:CCXI) is the most popular stock in this table. On the other hand Humacyte Inc. (NASDAQ:HUMA) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Warrior Met Coal Inc. (NYSE:HCC) is more popular among hedge funds. Our overall hedge fund sentiment score for HCC is 84.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately HCC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HCC were disappointed as the stock returned -7.5% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
