The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Cleveland-Cliffs Inc (NYSE:CLF).
Cleveland-Cliffs Inc (NYSE:CLF) investors should pay attention to an increase in hedge fund interest of late. Cleveland-Cliffs Inc (NYSE:CLF) was in 36 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 35. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CLF isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Scott Bessent of Key Square Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a gander at the recent hedge fund action encompassing Cleveland-Cliffs Inc (NYSE:CLF).
Do Hedge Funds Think CLF Is A Good Stock To Buy Now?
At the end of March, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. By comparison, 23 hedge funds held shares or bullish call options in CLF a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in Cleveland-Cliffs Inc (NYSE:CLF), worth close to $262.8 million, amounting to 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $93.9 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish contain Scott Bessent’s Key Square Capital Management, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners and Jeffrey Gendell’s Tontine Asset Management. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Cleveland-Cliffs Inc (NYSE:CLF), around 13.66% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, designating 7.54 percent of its 13F equity portfolio to CLF.
Now, specific money managers have jumped into Cleveland-Cliffs Inc (NYSE:CLF) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the largest position in Cleveland-Cliffs Inc (NYSE:CLF). Adage Capital Management had $35.2 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $30.2 million position during the quarter. The other funds with brand new CLF positions are Richard Driehaus’s Driehaus Capital, Len Kipp and Xavier Majic’s Maple Rock Capital, and Alexander Mitchell’s Scopus Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cleveland-Cliffs Inc (NYSE:CLF) but similarly valued. These stocks are Dolby Laboratories, Inc. (NYSE:DLB), Aegon N.V. (NYSE:AEG), Comerica Incorporated (NYSE:CMA), Floor & Decor Holdings, Inc. (NYSE:FND), Elastic N.V. (NYSE:ESTC), Everest Re Group Ltd (NYSE:RE), and Formula One Group (NASDAQ:FWONK). This group of stocks’ market caps are similar to CLF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLB | 34 | 783499 | 3 |
| AEG | 6 | 26294 | 2 |
| CMA | 32 | 704137 | -6 |
| FND | 38 | 1100201 | 7 |
| ESTC | 52 | 1884446 | 3 |
| RE | 32 | 520803 | 3 |
| FWONK | 37 | 1672098 | -5 |
| Average | 33 | 955925 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $956 million. That figure was $968 million in CLF’s case. Elastic N.V. (NYSE:ESTC) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 6 bullish hedge fund positions. Cleveland-Cliffs Inc (NYSE:CLF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLF is 72.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately CLF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CLF were disappointed as the stock returned 5.4% since the end of March (through 6/25) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
