While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Teck Resources Ltd (NYSE:TECK).
Is Teck Resources Ltd (NYSE:TECK) worth your attention right now? Prominent investors were turning bullish. The number of bullish hedge fund positions went up by 1 lately. Teck Resources Ltd (NYSE:TECK) was in 41 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TECK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 40 hedge funds in our database with TECK positions at the end of the second quarter.
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. Keeping this in mind we’re going to take a peek at the fresh hedge fund action surrounding Teck Resources Ltd (NYSE:TECK).
Do Hedge Funds Think TECK Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. By comparison, 27 hedge funds held shares or bullish call options in TECK a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Teck Resources Ltd (NYSE:TECK) was held by Antipodes Partners, which reported holding $179.7 million worth of stock at the end of September. It was followed by Contrarius Investment Management with a $179.3 million position. Other investors bullish on the company included Castle Hook Partners, Greenlight Capital, and Iridian Asset Management. In terms of the portfolio weights assigned to each position Contrarius Investment Management allocated the biggest weight to Teck Resources Ltd (NYSE:TECK), around 9.19% of its 13F portfolio. Greenlight Capital is also relatively very bullish on the stock, earmarking 7.56 percent of its 13F equity portfolio to TECK.
Now, key money managers have jumped into Teck Resources Ltd (NYSE:TECK) headfirst. Masters Capital Management, managed by Mike Masters, created the largest call position in Teck Resources Ltd (NYSE:TECK). Masters Capital Management had $49.8 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also made a $49.7 million investment in the stock during the quarter. The following funds were also among the new TECK investors: Alexander Mitchell’s Scopus Asset Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Mark R. Freeman’s Socorro Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Teck Resources Ltd (NYSE:TECK) but similarly valued. We will take a look at Open Text Corporation (NASDAQ:OTEX), Crown Holdings, Inc. (NYSE:CCK), Athene Holding Ltd. (NYSE:ATH), Icahn Enterprises LP (NASDAQ:IEP), CBOE Global Markets Inc (NASDAQ:CBOE), Williams-Sonoma, Inc. (NYSE:WSM), and Advance Auto Parts, Inc. (NYSE:AAP). This group of stocks’ market caps resemble TECK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OTEX | 20 | 386647 | 6 |
| CCK | 52 | 2138745 | -1 |
| ATH | 49 | 1675122 | 6 |
| IEP | 4 | 12385467 | 0 |
| CBOE | 35 | 970799 | 4 |
| WSM | 31 | 730615 | -3 |
| AAP | 35 | 899336 | 1 |
| Average | 32.3 | 2740962 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $2741 million. That figure was $1319 million in TECK’s case. Crown Holdings, Inc. (NYSE:CCK) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only 4 bullish hedge fund positions. Teck Resources Ltd (NYSE:TECK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TECK is 74.5. 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. Hedge funds were also right about betting on TECK, though not to the same extent, as the stock returned 6.3% since Q3 (through November 30th) and outperformed the market as well.
Follow Teck Resources Ltd (NYSE:TECK)
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Disclosure: None. This article was originally published at Insider Monkey.
