The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 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 Vale SA (NYSE:VALE).
Is VALE stock a buy? Hedge fund interest in Vale SA (NYSE:VALE) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VALE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). At the end of this article we will also compare VALE to other stocks including Deere & Company (NYSE:DE), Micron Technology, Inc. (NASDAQ:MU), and Mondelez International Inc (NASDAQ:MDLZ) to get a better sense of its popularity.
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Do Hedge Funds Think VALE Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in VALE 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, Fisher Asset Management was the largest shareholder of Vale SA (NYSE:VALE), with a stake worth $675.5 million reported as of the end of December. Trailing Fisher Asset Management was GQG Partners, which amassed a stake valued at $480.4 million. Crake Asset Management, Arrowstreet Capital, and AQR Capital 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 Contrarian Capital allocated the biggest weight to Vale SA (NYSE:VALE), around 39.16% of its 13F portfolio. Crake Asset Management is also relatively very bullish on the stock, designating 17.79 percent of its 13F equity portfolio to VALE.
Judging by the fact that Vale SA (NYSE:VALE) has witnessed falling interest from the smart money, logic holds that there exists a select few fund managers that decided to sell off their entire stakes heading into Q1. Interestingly, David Halpert’s Prince Street Capital Management dropped the largest investment of all the hedgies monitored by Insider Monkey, comprising close to $9.9 million in stock, and John Horseman’s Horseman Capital Management was right behind this move, as the fund cut about $4.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Vale SA (NYSE:VALE) but similarly valued. We will take a look at Deere & Company (NYSE:DE), Micron Technology, Inc. (NASDAQ:MU), Mondelez International Inc (NASDAQ:MDLZ), Mercadolibre Inc (NASDAQ:MELI), The TJX Companies, Inc. (NYSE:TJX), Anthem Inc (NYSE:ANTM), and Snowflake Inc (NYSE:SNOW). This group of stocks’ market valuations are closest to VALE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DE | 54 | 1804359 | 12 |
| MU | 100 | 8144429 | 21 |
| MDLZ | 50 | 2626457 | 0 |
| MELI | 79 | 8766711 | -2 |
| TJX | 68 | 2297227 | -10 |
| ANTM | 70 | 5186728 | 5 |
| SNOW | 54 | 7723382 | -5 |
| Average | 67.9 | 5221328 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 67.9 hedge funds with bullish positions and the average amount invested in these stocks was $5221 million. That figure was $2909 million in VALE’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand Mondelez International Inc (NASDAQ:MDLZ) is the least popular one with only 50 bullish hedge fund positions. Compared to these stocks Vale SA (NYSE:VALE) is even less popular than MDLZ. Our overall hedge fund sentiment score for VALE is 34.2. 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. Hedge funds dodged a bullet by taking a bearish stance towards VALE. Our calculations showed that the top 20 most popular hedge fund stocks returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st but managed to beat the market again by 0.4 percentage points. Unfortunately VALE wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was very bearish); VALE investors were disappointed as the stock returned 6.8% since the end of the fourth quarter (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.
