The 700+ 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 31. 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 Arch Coal, Inc. (NYSE:ARCH).
Is Arch Coal, Inc. (NYSE:ARCH) the right pick for your portfolio? The smart money is turning bullish. The number of bullish hedge fund positions rose by 3 in recent months. Our calculations also showed that arch isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most traders, hedge funds are seen as slow, outdated financial tools of the past. While there are over 8000 funds trading today, Our researchers choose to focus on the elite of this group, approximately 750 funds. These hedge fund managers handle bulk of the smart money’s total asset base, and by tailing their highest performing stock picks, Insider Monkey has figured out many investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
Let’s check out the latest hedge fund action encompassing Arch Coal, Inc. (NYSE:ARCH).
Hedge fund activity in Arch Coal, Inc. (NYSE:ARCH)
Heading into the second quarter of 2019, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ARCH over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Monarch Alternative Capital held the most valuable stake in Arch Coal, Inc. (NYSE:ARCH), which was worth $111.9 million at the end of the first quarter. On the second spot was Highland Capital Management which amassed $36.6 million worth of shares. Moreover, Anchor Bolt Capital, Skylands Capital, and Renaissance Technologies were also bullish on Arch Coal, Inc. (NYSE:ARCH), allocating a large percentage of their portfolios to this stock.
Now, some big names have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most valuable position in Arch Coal, Inc. (NYSE:ARCH). Arrowstreet Capital had $7.4 million invested in the company at the end of the quarter. Frederick DiSanto’s Ancora Advisors also initiated a $7.2 million position during the quarter. The other funds with brand new ARCH positions are Arvind Sanger’s GeoSphere Capital Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and David Harding’s Winton Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Arch Coal, Inc. (NYSE:ARCH). These stocks are Mueller Water Products, Inc. (NYSE:MWA), Guess’, Inc. (NYSE:GES), Benefitfocus Inc (NASDAQ:BNFT), and Global Net Lease, Inc. (NYSE:GNL). This group of stocks’ market values match ARCH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MWA | 18 | 211351 | -6 |
| GES | 18 | 104084 | -1 |
| BNFT | 22 | 213521 | 7 |
| GNL | 11 | 77172 | 4 |
| Average | 17.25 | 151532 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $327 million in ARCH’s case. Benefitfocus Inc (NASDAQ:BNFT) is the most popular stock in this table. On the other hand Global Net Lease, Inc. (NYSE:GNL) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Arch Coal, Inc. (NYSE:ARCH) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ARCH wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ARCH were disappointed as the stock returned -3.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
